Wayfair, an online home goods retailer, announced today was laying off nearly 900 employees as a way to realign investment needs and meet the company’s ongoing needs. This happens after the company announced a hiring freeze back in May.
The layoffs represent nearly 5 percent of the company’s global workforce and 10 percent of its corporate team, according to SEC filingswith 400 jobs being cut in Boston at the company’s headquarters.
“We saw the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed to hire a strong team to support this growth,” said founder and CEO Neeraj Shah at the company note to the employees. “This year, that growth did not materialize as we expected. Our team is too big for the environment we are in now and unfortunately we have to adjust.”
It is unclear which teams are specifically affected by the layoffs. TechCrunch reached out to Wayfair but was referred to the company’s memo.
Those laid off will receive compensation based on geography and length of service. According to the company, US-based employees will receive a minimum of 10 paid weeks in addition to other resources – such as relocation services.
The Boston-based company said it expects layoff costs to range between $30 million and $40 million, made up mainly of employee benefits. The hit will be reflected in the company’s current quarter, according to the SEC filing.
“We are actively navigating Wayfair to a level of profitability that will allow us to control our own destiny while still aggressively investing in the future,” Shah said. “We prioritized our work and set clear goals: to focus on the basics, drive cost efficiency and win more customer and supplier loyalty. This macro environment does not change our belief in the size of the opportunity ahead and we are moving purposefully to take advantage of this opportunity.”
During the first two years of the COVID-19 pandemic, the company was profitable and that took a toll on his stock, but it has since taken a hit. According to The Wall Street JournalShares of Wayfair fell more than 17% on Friday morning.