Wayfair, the online retailer of homewares, announced today that it is laying off nearly 900 employees to reprioritize investment needs to meet the company’s current needs. This comes after the company announced a hiring freeze back in May.
The layoffs account for nearly 5% of the company’s global workforce and 10% of its corporate team, according to SEC filings, with 400 job cuts in Boston at the company’s headquarters.
“We saw the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally have made every effort to hire a strong team to support that growth,” said founder and CEO Niraj Shah in the company’s statement to the employees. “This year, that growth hasn’t happened in the way we expected. Our team is too big for the environment we are in now and unfortunately we have to adapt.”
It is unclear which teams were specifically affected by the layoffs. TechCrunch reached out to Wayfair but was referred to the company’s memo.
Those fired will receive severance pay based on region and tenure. According to the company, US-based employees receive a minimum of 10 paid weeks in addition to other resources such as outplacement services.
The Boston-based company expects layoff costs of between $30 million and $40 million, consisting primarily of employee severance payments. According to the SEC filing, the hit will be reflected in the company’s current quarter.
“We are actively steering Wayfair toward a level of profitability that allows us to control our own destiny while investing aggressively for the future,” Shah said. “We have prioritized our work and set clear goals: Concentration on the essentials, increasing cost efficiency and more customer and supplier loyalty. This macroeconomic environment does not change our belief in the magnitude of the opportunity ahead and we are moving with purpose to capitalize on this opportunity.”
The company was profitable for the first two years of the COVID-19 pandemic and reflected that in its shares, but has since taken a hit. Wayfair’s stock fell more than 17% as of Friday morning, according to the Wall Street Journal.