Online home furnishing retailer, Wayfair, has announced plans to cut 1,650 jobs, admitting that it had over-hired during a period of strong economic growth.
In a filing with the Securities and Exchange Commission, Wayfair revealed that these job cuts would account for approximately 13% of its global workforce and 19% of its corporate team. The company anticipates that this action will result in annualized cost savings of over $280 million.
Despite taking measures to optimize its operations for future success, Wayfair recognizes that it still needs to refine its organizational structure to provide a solid foundation for growth. CEO Niraj Shah expressed this sentiment in an email to Wayfair employees.
As a result of the workforce reductions, the company expects to incur between $70 million and $80 million in severance and benefit costs, with the majority being realized in the fourth quarter. Nevertheless, Wayfair now predicts adjusted earnings before interest, taxes, depreciation, and amortization of over $600 million for fiscal 2024, surpassing previous analyst estimates of $479 million.
Following this announcement, Wayfair’s stock price rose by 15% in premarket trading Friday, reaching $58.57.
