Wayfair Cuts Nearly 900 Jobs to Reduce Costs Amid Slowing Growth
Online home goods retailer Wayfair lays off about 5% of its global workforce as pandemic-era e-commerce growth fails to materialize. The company expects to incur $30 to $40 million in severance costs during the current quarter.
Wayfair lays off nearly 900 employees, reducing its global workforce by approximately 5% and its corporate team by 10%. The online home goods retailer takes this step to reprioritize investments and align its staff size with current market conditions, cutting 400 jobs at its Boston headquarters. This downsizing follows a hiring freeze the company implemented in May.
CEO Niraj Shah explains that the company over-hired during the pandemic to support an e-commerce boom that ultimately does not sustain its initial momentum. Affected workers receive severance packages based on their location and tenure, with U.S. employees getting a minimum of 10 paid weeks along with outplacement services. Wayfair anticipates taking a $30 million to $40 million financial hit this quarter to cover these severance costs.
Despite the job cuts, Shah expresses confidence in the long-term market opportunity and says the company is steering toward profitability to control its own destiny. The stock market reacts negatively to the news, with Wayfair shares dropping more than 17% on Friday morning as the business pivots away from its pandemic-era profitability.