Wayfair is laying off about 870 workers as the online home goods seller trims costs in response to slowing sales and an inflation-driven shift in consumer spending.
The Boston-based company's cuts impact about 5% of its global workforce of 18,000 and roughly 10% of its corporate team, the company said Friday in a regulatory filing. Wayfair also said it plans "substantial" reductions in third-party labor costs.
The company grew quickly in recent years to keep pace with online purchases of home furnishings, with the pandemic accelerating the increase in online shopping, CEO Niraj Shah said Friday in announcing the job reductions in a memo to employees.
"This year, that growth has not materialized as we had anticipated. Our team is too large for the environment we are now in," he wrote.
The CEO earlier this month told analysts that the company's customers were being more cautious about discretionary spending as they paid more for gas and food.
Wayfair expects to save $30 million to $40 million related to the workforce cut, mostly on severance, which the company is offering based on location, time with company and job title. That includes a payout of first-quarter corporate bonuses for those who are eligible, Shah said. Workers in the U.S. will get a minimum of 10 weeks pay and continued vesting of employee equity through October.
The company in May froze corporate hiring for 90 days, pointing to uncertainty in the overall economy.
Wayfair's downsizing comes two weeks after it reported net revenue fell 14.9% in the second quarter from a year ago to $3.3 billion. The company reported a loss of $378 million during the period, versus a profit of $131 million a year earlier.
After trading at almost $200 a share at the beginning of 2022, the company's stock has slumped. The stock continued to slide on Friday, falling nearly 17% at $59.34.
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