BOSTON — Online furniture retailer Wayfair Inc. confirmed Friday it will cut roughly 5% of its global workforce, laying off about 870 employees in a bid to minimize expenses as e-commerce growth for home furnishings stalls.
According to WFXT-TV, nearly half of the layoffs will affect employees in the retailer’s home city of Boston.
The cuts also reflect a roughly 10% downsizing of its corporate team as Wayfair “plans to manage operating expenses and realign investment priorities,” the company stated in a regulatory filing obtained by The New York Times.
A Wayfair spokeswoman told the newspaper that the layoffs will primarily affect corporate roles in North America and Europe.
“We were seeing the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth,” Wayfair co-founder and CEO Niraj Shah wrote in a Friday letter to the company’s 18,000 employees. “This year, that growth has not materialized as we had anticipated.”
According to WFXT, Wayfair is offering employees severance packages based on geography, tenure and job level. In the United States, for instance, Wayfair is offering a minimum of 10 weeks of pay, as well as continued vesting of employee equity through October.
“I take responsibility for the impact this decision will have on the nearly 900 Wayfairians who will be told today they are no longer a part of building our company’s future,” Shah wrote in the memo.
Buoyed by a shift in pandemic-era shopping habits, Wayfair posted its first profit as a public company in the second quarter of 2020, four years after its initial public offering, when sales increased more than 80%. By Aug. 4, however, those pandemic-fueled gains had evaporated, and the company reported a nearly 15% decrease in year-over-year net revenue and a 24% decrease in active customers, the Times reported.
“During a difficult macroeconomic environment, we remain squarely focused on our customers and our suppliers, and on making sure Wayfair is their preferred platform for the home,” Shah said in the earnings statement obtained by the newspaper.
“We are tightly controlling our many levers and steering Wayfair in a financially responsible manner through this period,” he added.
Wayfair expects costs related to the layoffs to run between $30 million and $40 million in the third quarter, mostly related to employee severance and benefits, WFXT reported.
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