Online home goods giant Wayfair fired 870 workers, or 5% of its worldwide workforce, as a result of a pandemic growth spike that suddenly stalled after COVID.
In a message distributed to workers, Wayfair’s CEO, co-founder, and co-chairman Niraj Shah stated that he had pushed for team expansion as client growth and sales surged during the epidemic. According to several media sources, the rise was supposed to continue but never did, in part because of record-high inflation.
When the news of the layoffs first began to circulate, Wayfair shares, which trade on the New York Stock Exchange under the symbol W, fell by roughly 8% in premarket trading. At 11 a.m. EDT, shares were down approximately 12%.
The Globe stated that Wayfair’s market value decreased by 80% to less than $7 billion from nearly $35 billion last year.
The depressing report comes after Wayfair named Kate Gulliver its chief administrative and financial officer (CFO) in May.
In addition to a decline in revenue and consumers, Wayfair said that the industry-wide decline in demand for furniture and the rising supply chain costs were also hurting the company.
To meet the demand for eCommerce shopping, Ikea, for instance, is converting its warehouse shops into fulfillment centers. According to a May research, Williams-Sonoma, which also owns the Pottery Barn and West Elm brands, is stepping up its omnichannel initiatives.
According to the Boston Globe, Shah stated in the message to staff that Wayfair management is dedicated to leading the business “in a fiscally prudent manner.”
While continuing to make aggressive investments in the future, Shah stated, “We are actively leading Wayfair towards a level of profitability that will allow us to dictate our own destiny.” The macro-environment does not alter our opinion of the enormity of the opportunity, and we are taking deliberate action to take advantage of it.
