Wayfair is laying off 1,650 employees as part of its efforts around “right-sizing its cost structure.”
The cuts amount to about 13% of its global workforce and 19% of its corporate team, the furniture and home goods eCommerce company said in a Friday (Jan. 19) press release.
“I think the reality is that we went overboard in hiring during a strong economic period and veered away from our core principles, and while we have come quite far back to them, we are not quite there,” Niraj Shah, CEO and co-founder of Wayfair, said in a Friday message to employees. “The best way to make sure everyone in the company can thrive and that we can do the most for our customers is to make sure that we make the right decision in terms of what our go-forward organization should look like.”
Wayfair is reducing team sizes across the organization, reducing seniority in certain roles and achieving an expected annualized cost savings of more than $280 million, according to the press release.
Shah said in his message to employees that the company is consistently profitable, had made progress toward operating more efficiently and is gaining market share. However, the company still must be optimized for the future, he said.
Wayfair aims to be “lean and focused” as it was from 2002 to 2011, Shah said. As the company became publicly traded, took advantage of easy money and grew after that period, it opened up hiring and suffered from a lack of focus, he added.
When its annualized sales doubled during the pandemic, Wayfair grew its team again, only to enter a “bust period” beginning in mid-2022, Shah said.
Since then, the company made two corporate restructurings before the one announced Friday, he noted.
“I believe we need to stay focused as a company on what committed small teams can accomplish,” Shah said in the message to employees.
Wayfair cut about 1,750 employees — equal to 10% of its global workforce and 18% of its corporate staff at the time — in January 2023.
About five months earlier, in August 2022, the retailer laid off 870 employees, or 5% of its global staff at the time.
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