Wayfair IPO on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters
Wayfair is cutting 13% of its global workforce as the digital home goods retailer looks to trim down its structure, cut out layers of management and reduce costs, it announced Friday.
The company plans to lay off around 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 principles on resource allocation,” Wayfair’s CEO and cofounder Niraj Shah said in a statement. “Although persistent category weakness makes revenue growth challenging, we remain encouraged by the share gains we continue to see.”
The layoffs come after Hasbro, Etsy and Macy’s all announced cuts to their workforces as retailers contend with slowing demand and an uncertain economy. At the height of the holiday shopping season in mid-December, Hasbro and Etsy announced staff reductions of 1,100 and 225 workers, 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 has plans to close five stores.
Wayfair said the cuts were not related to fourth-quarter performance but were rather a proactive move to get the company back to its core structure.
During the pandemic, Wayfair saw its business explode as stuck-at-home consumers used stimulus dollars and savings to splurge on home goods like furniture and decor, leading Wayfair to significantly increase its headcount.
However, as the virus’s impact began to wane, the home goods sector overall started to see a pull back in demand. As a result, Wayfair has needed to make cuts to ensure its staffing levels are proportionate to how much business it’s doing.
