Wayfair is laying off around 870 employees as a cost-cutting measure in response to sluggish sales and an inflation-driven change in consumer spending.
The Boston-based company’s layoffs affect around 5% of its worldwide staff of 18,000 and nearly 10% of its corporate team, according to a regulatory filing published on Friday. Wayfair also stated that it intends “significant” labor cost savings for third parties.
CEO Niraj Shah said in a note to workers on Friday that the firm grew rapidly in recent years to keep up with online purchases of home goods, with the pandemic exacerbating the surge in online buying. “This year, the projected expansion has not materialized. Our staff is too huge for the current atmosphere “He composed.
The CEO informed analysts earlier this month that the company’s consumers had become more frugal with discretionary spending as petrol and food prices have increased.
Wayfair plans to save $30 million to $40 million as a result of the personnel reduction, mostly on severance packages based on geography, tenure, and job title. This includes the payment of first-quarter corporate incentives to qualified employees, according to Shah. U.S. workers will get a minimum of 10 weeks compensation and ongoing vesting of employee equity until October.
In May, the corporation suspended corporate employment for 90 days, citing economic uncertainties.
Wayfair’s reduction comes two weeks after the company revealed its second-quarter net sales decreased 14.9% year-over-year to $3.3 billion. During the time, the corporation recorded a loss of $378 million, compared to a profit of $131 million the previous year.
After trading for about $200 per share in the start of 2022, the company’s stock price has decreased. On Friday, the share price continued to decline, plunging over 17% to $59.34.