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Online home goods retailer Wayfair announced Friday that it is laying off approximately 1,650 employees, representing about 13% of its global workforce, in a move that is expected to save the company more than $280 million annually.
"The changes announced today reflect a return to our core principles on resource allocation, such as getting fit on spans and layers as well as focusing on our highest priorities," Wayfair CEO and co-founder Niraj Shah said in the news release.
"As a result, we're reducing team sizes across the organization, as well as reducing seniority in certain roles that we plan to rebuild with modified leveling over the course of this year," Shah said.
In a note to his employees, Shah said the company "went overboard in hiring during a strong economic period and veered away from our core principles, and while we have come quite far back to them, we are not quite there." He also went on to say that COVID also contributed to the increase in hiring, "a time where the company's annualized sales grew from $9 billion to $18 billion "almost overnight," according to Shah.
'Work longer hours': Wayfair CEO told employees last month
The news of the layoffs come about a month after Shah dished out some tough love in a year-end memo to his employees. In the memo, Shah said employees should be prepared to work longer hours and not be afraid to let work impinge on their personal lives.
"Working long hours, being responsive, blending work and life, is not anything to shy away from," Shah said in the email. "There is not a lot of history of laziness being rewarded with success. Hard work is an essential ingredient in any recipe for success. I embrace this, and the most successful people I know do as well."
He sought to enlighten workers on the accuracy of "Nirajisms," sayings about workplace culture attributed to the CEO that are either "not true, are old and no longer applicable, or are taken out of context," Shah said.
"The one I would reference here that I heard was 'Niraj said that he does not think that we should work late.' I would suggest that this is laughably false," the CEO wrote. "Hard work is essential for success, and a key part of getting things done. Everyone deserves to have a great personal life – everyone manages that in their own way – ambitious people find ways to blend and balance the two."
Shah kicked off the note by saying Wayfair, which cut 5% of its workforce in 2022, had turned a corner. In November 2023, the company reported sales of $2.9 billion in the quarter ending Sept. 30, up 3.7% over the year before. Its third-quarter net loss of $163 million is 42% lower than the $283 million net loss in the same quarter in 2022.