A Massive Online Retailer Now Lays Off 1,000 Employees

A massive online retailer now lays off 1,000 employees in efforts to align costs more closely with the pace of growth, the CEO said.

eBay layoffs have now grown to a whopping 1,000, which accounts for 9% of the retail giant’s workforce.

The company will also scale back contract work, CEO Jamie Iannone said.

eBay is grappling with external pressure including a “challenging macroeconomic environment,” and its “headcount and expenses have outpaced the growth of our business,” Iannone said.

The move will cost $90 million to $110 million, largely severance payments and post-employment benefits and most of it in Q4 2023, according to a filing with the Securities and Exchange Commission.

The workforce restructuring will be nearly complete by the end of Q2 this year, per the filing.

Nearly a year ago, the marketplace laid off about 500 employees.

In November, Chief Financial Officer Steve Priest said the company was “looking at every area of our cost structure.”

“And we can control our cost structure,” he also said, per an earnings transcript.

“I mean, we are operating in a rather dynamic macro environment and so we will lean in as we said, and make sure that our costs grow more slowly than revenue in 2024.”

The focus on cost containment is something of a departure, according to Wells Fargo analysts led by Ken Gawrelski.

“eBay is managing its cost base aggressively post a period of reinvestment in tech and product development,” Gawrelski said.

The company last year unveiled a ‘Certified by Brand’ luxury resale program, invested in sports trading card company COMC and introduced a trading card submission service.

The previous year eBay acquired collectibles tech platform TCGplayer for $295 million.

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Also Read: A US Company Now Declares An Unexpected Bankruptcy

Other Economy News Today

Market News Today - A Massive Online Retailer Now Lays Off 1,000 Employees.
Market News Today – A Massive Online Retailer Now Lays Off 1,000 Employees.

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

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Market News Today - A Massive Online Retailer Now Lays Off 1,000 Employees.
Market News Today – A Massive Online Retailer Now Lays Off 1,000 Employees.

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