Wayfair lays off 5% of workforce
Online furniture and home goods retailer Wayfair is laying off 870 employees. This reduction affects 5 percent of its global workforce and 10 percent of its corporate team. According to the company, its team is too big for the current economic environment.
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In 2021, the online platform reported a net revenue of 12.2 billion euros. Just a year before, the company entered the top 4 of the largest furniture stores in Germany with Wayfair.de. The company has been growing in Europe and it announced that it was expecting to continue that growth with more European expansions.
15% decrease in net revenue
However, Wayfair’s results have actually decreased this year. In its Q2 results, active customers, orders per customer, order deliveries and orders delivered via mobile app had decreased. Overall, the company saw a decrease of almost 15 percent in net revenue compared to its earnings in 2021.
‘Team is too large’
“Over the past few years, we have grown Wayfair significantly to keep pace with the ecommerce growth in the home category. We were seeing the tailwinds of the pandemic accelerate the adoption of ecommerce shopping, and I personally pushed hard to hire a strong team to support that growth”, said CEO Niraj Shah.
‘Our team is too large for the environment we are now in.’
“This year, that growth has not materialized as we had anticipated. Our team is too large for the environment we are now in and unfortunately we need to adjust.” However, it is not the first time that the company lays off a significant amount of employees. In February 2020, it laid off 550 workers, as the company was pursuing rapid growth.
Layoffs in the industry
Other companies are also shrinking their team as customer demand decreases. A month ago, Shopify announced that it would lay off 10 percent of its staff. And earlier this month, ecommerce investor Clearco fired 25 percent of its team.