Online furniture retailer Wayfair Inc (NYSE:W) announced a significant workforce reduction, laying off approximately 1,650 employees, representing 13% of its global workforce.
The move is part of the Boston-based company's ongoing cost-cutting initiatives, aiming to streamline its operations and reduce expenses amid challenging market conditions.
Wayfair said it anticipates annual cost savings of more than $280 million from the restructuring, as it seeks to achieve greater efficiency and align its operations with evolving market dynamics. This marks the third round of layoffs since August 2022 when the company began efforts to operate more efficiently.
The layoffs will particularly impact the corporate team, with 19% of its members facing job cuts. The focus is on reducing layers of management and leadership positions, as the company looks to reallocate resources more effectively.
Wayfair aims to deliver over $600 million of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024.
"The changes announced today reflect a return to our core principles on resource allocation,” CEO Niraj Shah said in a note to employees. “Although persistent category weakness makes revenue growth challenging, we remain encouraged by the share gains we continue to see."
The restructuring is expected to incur costs in the range of $70 million to $80 million, primarily consisting of employee severance and benefit costs. Most of these costs will be recorded in the first quarter of 2024.
Shares of Wayfair rose 12.1% on Friday morning to reach $57.11.