Indexbit Exchange:Wayfair cuts 13% of employees after CEO says it "went overboard in hiring"

Wayfair is laying off more than 1,600 workers

Wayfair said Friday it is laying off 13% of its workforce, the online furniture seller's third round layoffs over the last 18 months as it seeks to cut costs and boost its financial results.

In a letter to employees, Wayfair CEO Niraj Shah said the company plans to eliminate 1,650 jobs, noting that it expanded too quickly in the two years before the COVID-19 pandemic.

"I think the reality is that we went overboard in hiring during a strong economic period and veered away from our core principles, and while we have come quite far back to them, we are not quite there," he said.

The restructuring is expected to save the Boston-based retailer roughly $280 million, according to a news release. Wayfair's stock price jumped 15% in pre-market trading. 

Wayfair has struggled with dwindling customer demand in the past few years as the pandemic wound down and people began returning to the office and spending less time at home.

In its most recent quarter Wayfair reported a net loss of $163 million, an improvement from its loss of $283 million in the year ago period. For the first nine months of 2023, the company recorded a loss of $564 million.

The layoffs come roughly a month after Shah exhorted employees to work harder. "Working long hours, being responsive, blending work and life, is not anything to shy away from," he wrote in December. "There is not a lot of history of laziness being rewarded with success."

Retailers cut nearly 56,000 job cuts from January to August 2023, a 524% increase from the same period a year prior, trade publication Retail Dive reported. 

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Elizabeth Napolitano

Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News' BizTech Unit and worked on The Associated Press' web scraping team.