Wayfair hired too many, now makes big cuts
Wayfair is laying off 1,650 employees — or about 13% of its global workforce — due in part to going “overboard with corporate hiring during COVID,” the company’s CEO and co-founder Niraj Shah said in a note to employees Friday morning.
“I wanted to give you an update on Wayfair, where we sit, and the difficult steps we’re taking this morning to make us stronger,” Shah wrote in a lengthy email addressed to his “fellow Wayfarians,” which was also posted on its website.
Even though Wayfair has been “consistently profitable,” operating “more efficiently and effectively,” and “gaining market share at a fast pace,” Shah said recent steps the company took to prepare for the future “have not gotten us to where we need to be.”
As part of Shah’s effort to optimize the Boston-based online retailer for the months and years ahead, the multimillionaire entrepreneur said he had to make the “difficult decision to further reduce our headcount.”
The dramatic surge” in business during the first months of the pandemic — which doubled the company’s sales to $18 billion “almost overnight” — led to an increase in hiring, he wrote.
By mid-2022, however, “it was clear we were in a bust period,” he continued. “It was also clear that we had gone overboard with corporate hiring during COVID.”
Now, the company should focus on what “committed small teams can accomplish,” he wrote. “In many ways, having too many great people is worse than having too few.”
The announcement comes just weeks after Shah — who dropped off Forbes’ billionaires list in 2023 — made headlines for suggesting Wayfair employees should work longer hours and not shy away from “blending work and life.”
When announcing the layoffs on Friday, Shah thanked “the 1,650 team members who will be leaving us today,” and said he is confident they will find great jobs elsewhere, “given [their] strong skills and expansive experience.”
Wayfair had about 14,000 employees as of 2023, according to CNN Business. The layoffs should save the company an estimated $280 million annually.
All employees in North America should receive an email later on Friday informing them whether they will be affected by the cuts. The company said severance and other resources will be offered to those affected.
“I truly regret the impact this will have on you,” Shah wrote.