Wayfair Lays Off Another 1,750 Employees as it Aims to Boost Agility

Wayfair is advancing its plan to right-size its cost structure, with the goal of $1.4 billion in annualized cost savings by laying off an additional 1,750 employees, which represents 10% of its global workforce as of Dec. 21, 2022. Approximately 1,200 of the affected workers will be part of the corporate team, which is being cut by 18%.

The changes are designed to eliminate management layers to help the retailer become more agile. The labor portion of the restructuring plan, which builds on top of the 870 corporate job cuts made in August 2022, will create $750 million in annualized cost savings, putting Wayfair more than halfway toward its goal. The company expects to incur approximately $68 million to $78 million in costs, consisting primarily of employee severance and benefit costs, as a result of the workforce reduction.

“Although difficult, these are important decisions to get back to our 20-year roots as a focused, lean company premised on high ambitions and great execution,” said Niraj Shah, CEO, Co-Founder and Co-Chairman of Wayfair in a statement. “The changes announced today strengthen our future without reducing our total addressable market, our strategic objectives or our ability to deliver them over time. In hindsight, similar to our technology peers, we scaled our spend too quickly over the last few years. The good news for Wayfair is that we have operated in a highly productive and efficient way for the vast majority of our 20-year history, and we are now simply returning to that.”

Wayfair is aiming to break even on adjusted EBITDA in 2023 as its first step toward achieving a positive free cash flow. In addition to the layoffs, the company has approximately $500 million of annualized operational cost savings already underway and expects to achieve full realization of those savings by late 2023.


While the company won’t release its Q4 2022 results until February, Shah confirmed that its business momentum is strengthening. “We are encouraged by our recent topline performance and in particular the momentum in orders,” he said. “Our market share continues to improve as our core offering strengthens across key dimensions such as availability, speed and price.”

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