Wayfair is slashing 1,650 jobs, or 13 percent of its global workforce, weeks after the online furniture retailer’s CEO warned employees that ‘laziness isn’t rewarded.’
Shares of Boston-based Wayfair, which had dropped 23 percent in the past month, jumped 13.9 percent at the opening bell on Friday, following the early-morning layoffs announcement.
In a memo to employees, CEO Niraj Shah admitted the company ‘went overboard in hiring during a strong economic period’ and said the layoffs would ensure ‘everyone in the company can thrive’.
In late December, Shah drew backlash over a year-end message to employees chiding ‘laziness’ after the company returned to profitability following several prior rounds of layoffs.
‘Working long hours, being responsive, blending work and life, is not anything to shy away from. There is not a lot of history of laziness being rewarded with success,’ he wrote.
Wayfair is slashing 1,650 jobs, or 13 percent of its global workforce. CEO Niraj Shah (above) admitted the company ‘went overboard in hiring during a strong economic period’
![Wayfair said that it expected to realize approximately $280 million in annual savings through the layoffs, net of plans to rebuild a portion of the workforce over 2024](https://i.dailymail.co.uk/1s/2024/01/19/15/80224633-12983505-image-a-9_1705676733310.jpg)
Wayfair said that it expected to realize approximately $280 million in annual savings through the layoffs, net of plans to rebuild a portion of the workforce over 2024
In his memo on Friday, Shah said that layoff notification had already begun in Europe, and that all North American employees would receive an email on Friday notifying them whether their job had been cut.
On LinkedIn, impacted workers shared news of their layoffs and declared themselves open to new opportunities.
‘I’m not leaving with an attitude of sadness or disappointment,’ wrote Jason Farneth, a senior product manager who was laid off after nearly two years at Wayfair.
‘Knowing the health of Wayfair, there was no way to sustain the team sizes they have. It was a simple equation necessary to save the jobs of those that are staying,’ he added.
Farneth shared that he planned to take a previously-scheduled family vacation over the weekend, and then launch his job hunt on Monday.
In a Discord chat devoted to former Wayfair employees, laid off employees who work remotely said they had received boxes to mail in their laptop and other company equipment, with a deadline to return the items.
Others, who work in the company’s offices, wondered whether they would be able to return to retrieve personal items from their desks.
‘Coming back from medical leave and being laid off just days in, is a hard thing to process,’ one person wrote in the anonymous forum.
‘Getting laid off a week after being told I was getting promoted,’ wrote another.
In regulatory filings, Wayfair said that it expected to incur roughly $70 to $80 million in restructuring costs in the layoffs, primarily attributed to employee severance packages.
Wayfair also said that it expected to realize approximately $280 million in annual savings through the layoffs, net of plans to rebuild a portion of the workforce over 2024.
![Products are displayed at Wayfair's first store in the Natick Mall in Massachusetts. Wayfair has undertaken multiple rounds of layoffs, after growing explosively during the pandemic](https://i.dailymail.co.uk/1s/2024/01/19/15/80224629-12983505-image-a-10_1705676738029.jpg)
Products are displayed at Wayfair’s first store in the Natick Mall in Massachusetts. Wayfair has undertaken multiple rounds of layoffs, after growing explosively during the pandemic
![Shares of Boston-based Wayfair, which had dropped 23 percent in the past month, jumped 13.9 percent at the opening bell on Friday](https://i.dailymail.co.uk/1s/2024/01/19/15/80226911-12983505-image-a-11_1705676913995.jpg)
Shares of Boston-based Wayfair, which had dropped 23 percent in the past month, jumped 13.9 percent at the opening bell on Friday
Those annualized savings include $150 million of cash compensation savings, $80 million in equity-based compensation relief, and a $50 million reduction in capitalized technology labor.
Wayfair has undertaken multiple rounds of layoffs over the past year, after growing explosively during the pandemic, when home-bound consumers spent heavily on furnishings and online commerce boomed.
The company made five percent of its workforce redundant and enforced large-scale layoffs last January and August, with 1,750 jobs and 870 jobs cut respectively.
Wayfair reported a loss of $163 million in the third quarter of 2023 on revenue of $2.94 billion, compared to $283 million lost on $2.84 billion in sales in the same quarter a year earlier.
Last month, co-founder and CEO Shah shared a year-end message with employees, touting that the company had returned to profitability.
But Shah also used his end-of-year message to warn employees that hard work is still required, despite a successful year where repeat customers are back.
‘Winning feels good – and is a great reward for all of our efforts,’ he wrote.
‘Our market share is growing nicely, our repeat is increasing, our suppliers are leaning in, and we are profitable. This is something to be very proud of.
‘We still have some work to do to make sure that we get fully back. And this is what I want us all to push on in the weeks and months to come.
‘Winning requires hard work. I believe that most of us, being ambitious individuals, find fulfillment in the joy of seeing our efforts materialize into tangible results.’
Shah co-founded Wayfair in August 2002, and he was worth an estimated $3.6 billion in 2021, according to Forbes.
But his fortuned dropped to $1.6 billion in 2022, and last year he fell off the Forbes billionaires list, as Wayfair stock plunged.
Wayfair shares hit an all-time high closing price of $345.47 on March 22, 2021. They have fallen 83 percent since then, opening at $58.02 on Friday.