Wayfair saw sales surge early in the pandemic as customers stayed at home and showed interest in renovating their premises and shopping online, but today announced it was laying off 870 employees. In a filing with the Securities and Exchange Commission (SEC), the online furniture and home accessories retailer said the “workforce reductions” will affect 5 percent of its global workforce and 10 percent of its corporate team.
In the company’s second-quarter results, released Aug. 4, Wayfair reported a decrease in active customers, orders per customer, order shipments, and a slight decrease in orders shipped through Wayfair’s mobile app and elsewhere. Overall, Wayfair saw its net income decline nearly 15 percent compared to its earnings in 2021.
In a company memo sent to employees on Friday, Wayfair CEO Niraj Shah explained the layoffs:
“Over the past several years, we have significantly expanded Wayfair to keep pace with e-commerce growth in the home category. We saw the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I’ve personally tried hard to hire a strong team to support that growth. This year, this growth has not occurred as expected. Our team is too big for the environment we are in now and unfortunately we have to adapt.”
With costs rising of late and fears of a recession lingering, companies in many industries have downsized their teams in response to a changing sales environment following the peak of the pandemic, saying they now need to save money. The Boston Globe and Forbes reported in February 2020 that Wayfair laid off about 550 workers, with Shah blaming Wayfair’s “rapid drive for growth” and saying it “had its downsides.” In May of this year, Wayfair announced a 90-day hiring freeze.
E-commerce company Shopify laid off 1,000 employees in July. Last week, Peloton announced it would lay off 800 employees (after laying off 2,800 employees in February) and begin closing the doors of its brick-and-mortar showrooms beginning in 2023. Tech companies like Snap, SoundCloud, Robinhood, and even Netflix have been laying off employees lately.