Wayfair said Friday it will lay off 1,750 employees to support company-wide restructuring and cost-cutting efforts.
Wayfair reported a revenue decrease of 9% year over year and a $286 million loss in the third quarter of 2022. Sharp declines in recent quarters come after the Massachusetts-based retail giant saw a 55% jump in its revenue in 2020 to $14.1 billion.
"Unfortunately, along the way, we over complicated things, lost sight of some of our fundamentals and simply grew too big," Shah said in the email to staff. "On an operating basis, we can see and feel that we're not as agile as we used to be or need to be." Shah wrote that the company's operating expenses relative to its revenue grew to 17% in the past year after sitting at about 10% to 11% for most of the company's 20-year history. In addition to layoffs, he added the retailer has slimmed costs in advertising, insurance policies, janitorial services and software licenses.
The company now expects to return to adjusted EBITDA profitability earlier in 2023 as a result of these cost-cutting efforts, according to the press release. "The changes today are largely about reducing management layers, right-sizing in certain places, and reorganizing to be more efficient," Shah said.
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