Home News Wayfair Stock Rises as Home Goods Retailer Cuts 1,650 Jobs

Wayfair Stock Rises as Home Goods Retailer Cuts 1,650 Jobs

by SuperiorInvest

Key takeaways

  • Wayfair is laying off 1,650 employees or about 13% of its workforce and 19% of its corporate team as it cuts costs.
  • The home goods retailer said it anticipates the move will generate $280 million in annualized savings.
  • Wayfair shares rose more than 10% in early trading Friday following the news.

Wayfair (W) shares soared more than 10% in early trading Friday after the home goods retailer cut jobs in an effort to reduce expenses.

Wayfair said it was laying off 1,650 employees, about 13% of its global staff and about 19% of its corporate team.

The company said the decision was made after completing “a comprehensive, organization-wide analysis of the appropriate team size and structure.” Wayfair added that the cuts are expected to generate $280 million in annualized savings.

CEO Niraj Shah wrote in a letter to employees that after a boom in business during the COVID-19 pandemic, the company “went overboard” on corporate hiring and has already had two restructurings since the summer of 2022 to “try to adjust the size.” this.”

He said the measures being taken now “reflect a return to our basic principles on resource allocation, such as getting fit in chunks and layers, as well as focusing on our top priorities.”

Shah said he was “increasingly focused on generating adjusted EBITDA in excess of stock-based compensation as well as capital expenditures,” adding that he intended to act quickly to “drive meaningful improvements” at the company.

The move follows similar job cuts by retailers Etsy (ETSY) and Macy’s (M). Wayfair said it anticipates the layoffs will result in costs of between $70 million and $80 million in the current quarter.

Wayfair shares rose 10.1% to $56.04 per share at approximately 10:45 a.m. ET on Friday. They have gained more than 44% over the past year.

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