Online home goods retailer Wayfair is laying off 1,650 employees, which constitutes 13% of its global workforce. Wayfair CEO Niraj Shah acknowledged that the company had overhired during the robust economic period in 2020, when online shopping surged amid pandemic lockdowns. The demand for home goods at that time led to a dramatic increase in sales for Wayfair. However, as of mid-2022, the company experienced a downturn, prompting rounds of layoffs in 2022 and 2023. Shah emphasized the need for the company to focus on what committed small teams can accomplish.
The layoffs will affect nearly 20% of the corporate team, with the total job reductions expected to save Wayfair approximately $280 million annually. All affected workers will receive an email outlining their future with the company, and severance packages will be offered. Wayfair, which had about 14,000 employees as of 2023, has faced challenges in the changing economic landscape, including inflation, disrupted supply chains, and shifting consumer spending patterns.
Wayfair’s fortunes changed since the beginning of the pandemic when it experienced significant success due to increased demand for home furnishings and decor. However, the current economic environment, marked by inflation, changing consumer behavior, and supply chain disruptions, has impacted the company’s performance. In his recent communications with employees, CEO Niraj Shah encouraged a strong work ethic, urging employees to blend work and life and emphasizing the importance of hard work in achieving success. Despite these challenges, Wayfair’s stock saw a nearly 16% increase in premarket trading following the announcement of layoffs.