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Furniture retailer Wayfair has announced a 10% reduction in its global workforce, equivalent to around 1,750 employees as part of its new cost efficiency plan.
Wayfair said this includes approximately 1,200 or 18% of corporate employees and reflects efforts to eliminate management layers and reorganise to be more agile.
Including cuts made in August 2022, it said the labour portion of the plan represents approximately $750m (£608.9m) in annualised cost savings, with the major steps necessary to realise these savings now complete.
Wayfair said the move combined with recent topline performance and additional cost savings are “driving faster progress toward the company’s profitability objectives”.
The company now expects to reach its adjusted EBITDA breakeven commitment earlier in 2023 as the first step toward its goal of generating sustainable positive free cash flow.
Niraj Shah, CEO and co-founder, and co-chairman, said: “Although difficult, these are important decisions to get back to our 20-year roots as a focused, lean company premised on high ambitions and great execution.
“The changes announced today strengthen our future without reducing our total addressable market, our strategic objectives, or our ability to deliver them over time. In hindsight, similar to our technology peers, we scaled our spend too quickly over the last few years. The good news for Wayfair is that we have operated in a highly productive and efficient way for the vast majority of our 20 year history, and we are now simply returning to that.”
She added: “To our colleagues departing Wayfair, I want to thank you for your contributions to the company and for the impact you’ve had on the business. We’re deeply saddened that these changes will take us in different directions.”
