Wayfair IPO on the New York Stock Exchange.
Lucas Jackson | Portal
Wayfair is cutting 13% of its global workforce as the digital home goods retailer looks to downsize, cut management levels and cut costs, the company announced Friday.
The company plans to lay off about 1,650 employees, including 19% of its corporate team, with a focus on people in management and leadership positions, the company said.
The restructuring – the third Wayfair has implemented since summer 2022 – is expected to save the company about $280 million, it said.
“The changes announced today reflect a return to our core resource allocation principles,” Wayfair CEO and co-founder Niraj Shah said in a statement. “Although continued category weakness makes sales growth challenging, we remain encouraged by the market share gains we continue to see.”
The layoffs come after Hasbro, Etsy and Macy's all announced workforce cuts as retailers grapple with slowing demand and an uncertain economy. At the height of the holiday shopping season in mid-December, Hasbro and Etsy announced layoffs of 1,100 and 225 employees, respectively, and on Thursday Macy's said it plans to cut more than 2,300 employees, or 3.5% of its workforce. The department store retailer also plans to close five branches.
Wayfair said the cuts were not related to fourth-quarter performance but rather were a proactive step to return the company to its core structure.
During the pandemic, Wayfair's business exploded as stuck-at-home consumers used stimulus money and savings to splurge on home goods like furniture and decor, prompting Wayfair to significantly increase its headcount.
However, as the impact of the virus subsided, there was an overall decline in demand in the household goods sector. As a result, Wayfair has had to make cuts to ensure its staffing levels are commensurate with its business volume.