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Wayfair Inc. said it’s cutting about 1,750 jobs, or 10% of its workforce, becoming the latest company to seek to bring costs in line with a new economic reality.
The company said Friday the reductions would include about 18% of corporate employees, reflecting efforts to eliminate management layers and become more agile.
The moves are part of a cost-reduction plan initiated in August, when Wayfair announced cuts of about 870 positions. The initiative will amount to more than $1.4 billion in annualized cost actions, the company said, and is expected to help it break even on an adjusted earnings before interest, tax, depreciation and amortization basis earlier in 2023, as the first step toward positive free cash flow. The stock rose 5% in early New York trading at 7:25 a.m.
“Although difficult, these are important decisions to get back to our 20-year roots as a focused, lean company premised on high ambitions and great execution,” Chief Executive Officer Niraj Shah said in the statement. “In hindsight, similar to our technology peers, we scaled our spend too quickly over the last few years.”
The online home-goods retailer has struggled with sales declining for more than a year after revenue boomed during the early stages of the pandemic when U.S. shoppers spent on fixing up their houses. Wayfair’s shares have fallen about 75% in the past 12 months.
These cuts add to the pain for workers in the tech and e-commerce sectors. Earlier on Friday Alphabet Inc. announced it would cut 12,000 jobs globally, following similar moves this week by Amazon.com Inc. and Microsoft Corp., who began eliminating 28,000 jobs between them.
Matt Townsend reports for Bloomberg News.
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