Online pet supplies retailer Chewy has recently undergone a round of layoffs, impacting over 200 employees across multiple locations.
The layoffs include roles in human resources (HR), recruiting, data and business intelligence, TechCrunch reported Tuesday (Nov. 14). They include some directors and higher managers.
Chewy spokesperson Diane Pelkey told the media outlet that the workforce reduction is part of the retailer’s “overall strategy and ongoing focus on becoming an ever more agile and disciplined company.”
“As we head into 2024, we took the opportunity to consolidate some of our headcount and align our efforts into priorities which we believe will gain us the most significant customer wins and generate the highest business returns, to enable us to strengthen the company’s future,” Pelkey said, per the report.
Chewy has faced concerns over declining active users on its eCommerce site, according to the report. The number of active users fell slightly from 20.49 million to 20.39 million over the past year.
Chewy CEO Sumit Singh has also noted that cautious consumer behavior influenced by inflation has led to a shift toward purchasing lower-priced items like dry dog food and foregoing pet treats, the report said.
Chewy was acquired by PetSmart in 2017 for $3.35 billion but later split off as a separate entity, per the report. The company went public in 2019, and BC Partners, which acquired Chewy earlier, remains a large shareholder.
During the retailer’s most recent earnings call, Singh said the changes in consumer behavior have presented a significant opportunity for Chewy to further establish itself as a leader in the online pet retail space. He noted that pet owners are prioritizing consumables and health products over traditional hard goods.
“In the past it used to be $80 on consumables and health, and $20 on hard goods,” Singh said. “That $20 has essentially shifted out of hard goods, and most of it is now being spent on consumables and health.”
Pet health and wellness company Petco said in August that it is pursuing cost savings and productivity enhancements in response to pressure on discretionary spending. These include “initiatives to unlock a targeted $150 million in cost savings and productivity enhancements by the end of fiscal 2025,” Petco CEO Ron Coughlin said at the time.