A massive furniture company now lays off 1,650 employees, which represent approximately 13% of its global workforce.
Wayfair has laid off about 1,650 employees, the company said Friday.
The online home decor retailer said the cuts represent about 19% of its corporate team and 13% of its global workforce.
The move is expected to give the company more than $280 million in annualized cost savings.
About $150 million of that will come from cash compensation savings.
However, the restructuring will likely cost Wayfair approximately $70 million to $80 million in severance and benefits costs, most of which are anticipated to be incurred in the first quarter, reports RetailDive.
While CEO Niraj Shah in an open letter to employees pointed to “many things at the company that are going well,” including gaining share with customers and making progress to operate more efficiently, the retailer has faced challenges.
The company “went overboard” with hiring during the height of the pandemic, when the retailer’s annualized sales doubled to $18 billion from $9 billion as people spent more on their homes, Shah said.
This is Wayfair’s third round of restructuring since the summer of 2022.
The company laid off 870 employees in August of that year.
Last January, a whopping 1,750 people were also let go.
This time, Shah said they decided to err on the side of having too few people versus too many.
“Each time we used our best judgment, identified the cost target we needed to hit, and believed we were resizing to the right point,” Shah said Friday.
“In many ways, having too many great people is worse than having too few.
With too few, you get a lot done quickly, but you may not get everything done that you want.
But having too many causes inefficiency, coordination costs, and investments in lower-return activities.
That is what we have been experiencing and what we need to end.”
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Also Read: Massive Layoffs in Ohio Now Announced For 2024
Other Economy News Today
A massive mall retailer is now laying off 2,350 people, or 3.5% of its workforce across the entire United States, sources report.
Macy’s has announced that it will reduce 3.5% of its workforce and has plans to shut down a total of five of its full-line stores.
In a statement sent via email, a spokesperson for Macy’s said, “In anticipation of implementing a new strategy to adapt to the evolving needs of consumers and the market, we have made the tough choice to streamline our company by reducing our workforce by 3.5%.”
Reports indicate that approximately 2,350 corporate positions will be cut by as early as this month.
Supply chain automation, some outsourcing, and faster decision-making were reportedly among the reasons for the cuts.
The Wall Street Journal first reported the news.
Retailers often lay off employees and announce store closures after the holidays, especially if they had a sluggish sales season.
However, Americans spent at a faster clip in December from the month prior, the Commerce Department said this week.
The company opened its first Macy’s in 1858 and now operates about 500 Macy’s branded stores, as well as 55 of the more upscale Bloomingdale’s chain.
In addition to the closures of anchors of five malls in California, Florida, Hawaii, and Virginia, Macy’s will sell and relocate two furniture stores.
A group of investors in December reportedly proposed to take Macy’s private at a vulnerable moment for the famed company. Macy’s has not commented on the activist attempt.
Macy’s has attempted numerous strategies in recent years to revitalize business, such as new brands and smaller stores, but the moves have not altered its long-term trajectory.
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Also Read: A US Company Now Declares An Unexpected Bankruptcy
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