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In a recent reorganization move, Wayfair lets go of 1,650 employees.

Global workforce reduction, marking the third round in approximately 18 months, impacts 13% of its worldwide employees and 19% of its corporate staff.

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Head's Up: Wayfair's Latest Restructuring Round

  • Thousands of employees at the online home decor giant, Wayfair, are saying goodbye this quarter. That's the word directly from the company. With a corporate team hit hardest, approximately 1,650 positions will be axed, equating to about 19% of their corporate workforce and 13% of the global team.
  • The move is set to save the company over $280 million annually. Approximately $150 million of this will come from savings on cash compensation, but the restructuring is expected to come at a cost. Wayfair anticipates spending around $70-$80 million on severance and benefits, with most expenses incurred during Q1.
  • In a candid letter to employees, CEO Niraj Shah acknowledged the good things happening at the company, such as customer share gains and operational efficiencies. However, the retailer has wrestled with obstacles lately. During the pandemic peak, Wayfair, like many others, over-hired, with sales doubling to $18 billion from $9 billion as homebound consumers splurged on home improvements.

Get the Dirt:

In a recent reorganization move, Wayfair lets go of 1,650 employees.

This is the third round of restructuring for Wayfair since the summer of 2022. Back then, they chopped 870 employees in August and let another 1,750 go in January this year. This time, Shah emphasized the importance of being lean. "We've been struggling with inefficiency, coordination costs, and investments in lower-return activities," he stated. "We need to nip that in the bud."

Those who receive the axe will enjoy comprehensive support, with severance, employee assistance resources, networking assistance, and other perks in the package. Wedbush, analysts who keep a keen eye on the home sector, believe it will show a slight rebound this year, with the online channel expected to outperform its offline counterpart in 2024.

Wayfair has been rolling with the punches, managing to post positive Q3 results in 2022. Their third-quarter revenue rose 3.7% year-over-year to $2.9 billion, with their operating loss falling 59% to $152 million and their net loss dropping 42% to $163 million. Y'all thought they were done, but Wayfair is fighting hard to stay afloat and capture a larger slice of the market. Keep an eye on this elephant in the home transformation space.

  1. The AI-powered online home decor giant, Wayfair, is undergoing its third restructuring round since summer 2022, with the latest move expected to save the company over $280 million annually.
  2. The restructuring will result in approximately 1,650 positions being axed, equivalent to about 19% of their corporate workforce and 13% of the global team.
  3. The company anticipates spending around $70-$80 million on severance and benefits, with most expenses incurred during Q1.
  4. In a letter to employees, CEO Niraj Shah acknowledged the challenges Wayfair has faced, including over-hiring during the pandemic peak.
  5. Shah emphasized the importance of being lean and reducing inefficiency, coordination costs, and investments in lower-return activities.
  6. Despite the restructuring, analysts believe the online home sector will show a slight rebound this year, with Wayfair expected to outperform its offline counterpart in 2024, improving their EBITDA and overall business finance.
Global workforce reduction, marking the third such action over the past 18 months, affects 13% of its employees on a global scale and 19% of its corporate team.

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