Struggling online retailer Wayfair on Friday said it will slash around 1,650 employees — or 13% of its global workforce of roughly 14,000 — just weeks after its billionaire CEO caused a stir by saying workers should log longer hours.
Niraj Shah, the boss of the Boston-based furniture-selling e-commerce site, said the company needed to cut costs — its third round of layoffs since summer of 2022 –after going “overboard” on hiring during the pandemic.
The layoffs come after Shah sent out a year-end note to staffers telling them “working long hours, being responsive, blending work and life, is not anything to shy away from.”
The job cuts are part of a restructuring that will slash 19% of Wayfair’s corporate team and are expected to save the company about $280 million, it said.
“By mid 2022 it was clear we were in a bust period,” Shah said in a statement after announcing the layoffs. “It was also clear that we had gone overboard with corporate hiring during Covid.”
Wayfair joins other retailers including Macy’s, Hasbro and Etsy who recently announced massive job cuts as inflation and credit card debt wallop shoppers.
The company said it will take a $70 million to $80 million hit from the layoffs, consisting primarily of employee severance and benefit costs, most of which would be recorded in the first quarter of 2024.
It now expects to deliver over $600 million of adjusted earnings before interest, taxes, depreciation and amortization in 2024.
Analysts on average expect $479.3 million, according to LSEG data.
Wayfair shares were up nearly 10% in mid-morning trading Friday.
“Persistent category weakness makes revenue growth challenging,” Shah said.
“Although we’ve taken important steps to get ourselves optimized to win and fit for the future, the reality is they have not gotten us to where we need to be,” he said in memo to staff.
Last month, Shah sent out his now-infamous plea for employees to work harder.
“Winning requires hard work. I believe that most of us, being ambitious individuals, find fulfillment in the joy of seeing our efforts materialize into tangible results,” he wrote.
“Working long hours, being responsive, blending work and life, is not anything to shy away from. There is not a lot of history of laziness being rewarded with success.”
With Post Wires
