Wayfair Announces Layoffs of 1,750 Employees

Wayfair Inc. Is a Leading Online Retailer of Home Furnishings And Décor. The Company Offers an Extensive Selection Of Products From Over 10,000 Suppliers. Wayfair Was Founded In 2002 And Is Headquartered In Boston, Massachusetts.

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Wayfair is laying off approximately 1,750 workers, or 10% of its workforce. This is due to the company's shrinking sales after a pandemic-driven boom.
Niraj Shah, co-founder and CEO of Wayfair, sent an email to staff on Friday morning saying that the company had become too large.

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"We're making some changes today to streamline our management structure, reduce costs in some areas, and improve our overall efficiency," he said.
According to The Wall Street Journal, the company is preparing to lay off more than 1,000 employees. This is a significant reduction in staff, and it will undoubtedly have an impact on the company's operations.

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This is the second round of layoffs at Wayfair in six months. The company said in August that it was cutting about 870 jobs, or about 5% of its global workforce.
Executives say that the two rounds of layoffs will save the company $750 million annually as part of a restructuring plan that aims to reduce expenses by $1.4 billion.
Google's parent company, Alphabet Inc., has announced it will cut around 12,000 jobs, reducing its staff by 6%. This move joins similar ones made by Amazon.com Inc., Microsoft Corp. and other technology companies in recent months, in response to slowing consumer spending, high inflation and rising interest rates.

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Wayfair has aggressively added staff during the pandemic to expand its warehouse operations and customer-service teams. It had 16,681 full-time equivalent employees as of the end of 2021, up from 12,100 at the end of 2018. Its customer-service staff roughly doubled over that period to about 4,900 people, according to company filings.

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Wayfair's sales surged in 2020 as people ordered home-office equipment and furnishings during the pandemic. However, sales declined 3% in 2021 and revenue fell almost 13% during the first nine months of 2022. The company had a nearly $1 billion loss for the first nine months of 2022.

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Last year, executives discussed plans to reduce spending and focus on profitability. They said in November that the company planned to deliver more than $500 million in annualized cost savings, including reducing the workforce and third-party labor costs, and making operational changes.

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Investors have become less interested in Wayfair since the pandemic began. The company's stock has fallen 83% in 2020, while the S&P 500 index has only declined by 19.4%. Wayfair is currently valued at around $4.1 billion, down from its peak of $35.8 billion in March 2021.

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In recent months, consumers have been spending less on a variety of goods due to high inflation and concerns about a slowing economy. U.S. retail spending fell 1.1% in December, which was a dismal end to the holiday shopping season. Sales at furniture and home-furnishings stores fell even more sharply, down 2.5% in the month.
In November, Wayfair reported strong sales during the Thanksgiving and Black Friday weekend, with U.S. sales increasing compared to the same period a year ago. The company attributed the strong performance to its focus on providing a great customer experience, both online and in-store. The company's shares rose by about 6% in Friday's premarket trading.