Wayfair is an online home goods retailer announced that that it would be laying off around 800 employees in order to shift priorities for investment and to meet current demands. The announcement comes just a few months after the company announced the decision to put in place a hiring stoppage in May.
The cuts amount to 5 percent of the company’s global workforce, and 10 percent of its corporate staff according to SEC reports and 400 positions being eliminated within Boston at the headquarters of the business.
The company’s CEO and founder, Niraj Shah, wrote in an email to staff members, “We were seeing the tailwinds of the epidemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to create a solid team to support that development.” “The expansion hasn’t occurred this year as planned, unfortunately. For the scenario we’re in right now, our crew is far too huge. We must, regrettably, adjust.”
It’s unclear which departments are specifically affected by the reductions. It attempted to reach Wayfair but was told to refer to the memo issued by the company.
The employees who are laid off will be offered an severance payment that is based on tenure and geography. The company says U.S.-based workers will be offered the minimum of 10 pay weeks, in addition to other sources, like outplacement assistance for instance.
The Boston-based firm stated that it expects layoff expenses to be between $30 and $40 million, primarily composed of severance payments to employees. As per the SEC filing, the loss will be recorded in the current quarter of the business.
“We are actively navigating Wayfair towards a level of profitability that will allow us to control our own destiny, while still investing aggressively in the future,” Shah declared. “We’ve prioritised our efforts and have set specific goals: to concentrate on the fundamentals, increase efficiency in costs and increase customers and suppliers’ loyalty. This macro-economic environment does not alter our conviction in the magnitude of the opportunities ahead and we’re working hard to capitalize on the opportunity.”
In the initial two decades of COVID-19 pandemic the company had a profit and this was evident in its stock. However, it the stock has since suffered a decline. In the words of the Wall Street Journal, Wayfair’s stock plunged by over 17% in the morning.