Wayfair lays off 5% of employees, shares fall

Online furniture retailer Wayfair Inc. plans to lay off about 870 employees to reduce spending.

Proposed job cuts account for about 5% of Wayfair’s W,
+2.68%
global workforce and about 10% of its corporate team, the company said in a filing with the Securities and Exchange Commission Friday morning. Wayfair also announced that it plans to make “significant reductions in its third-party labor costs.”

Executives estimate Wayfair will incur approximately $30 million to $40 million in costs related to severance, benefits and other areas related to the layoffs. They expect “essentially all” of that spending in the third quarter.

Wayfair shares are down more than 7% in premarket trading on Friday.

Wayfair’s management team previously discussed plans to reduce spending for the company’s second-quarter conference call in early August, as Chief Executive Niraj Shah acknowledged it was “unmistakable that consumer behavior is being influenced by both inflationary pressures and economic and geopolitical concerns.” becomes”.

He added that with rising gas and grocery costs, Wayfair’s “bulk customers” are “more judicious about where their free dollars go.” Additionally, as pandemic conditions ease, some Wayfair customers have chosen to shift more discretionary spending to travel and away from “goods.”

The discussion was opened with comments from Mastercard Inc. MA,
+0.57%
Chief Executive Michael Miebach, who mentioned on the payments giant’s conference call in late July that, broadly speaking, he’s seen “some spending shifts toward gas and groceries out of discretionary categories like home furnishings in the US.”

Wayfair’s Shah said on his company’s earnings conference call that the retailer will “intensify our focus on cost efficiencies across the board” without “sacrificing key future growth drivers and enablers.”

Wayfair Joins Companies Like Shopify Inc. SHOP,
-1.18%
and Robinhood Markets Inc. HOOD,
-2.40%,
which also recently announced major job cuts.

https://www.marketwatch.com/story/wayfair-to-lay-off-5-of-employees-stock-falls-11660911623?rss=1&siteid=rss Wayfair lays off 5% of employees, shares fall

Brian Lowry

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