Wayfair (NYSE:W) layoffs are a hot topic on Friday as the e-commerce company announces major cuts to its workforce to streamline operations.
That has the company cutting 1,650 employees or 13% of its total global workforce. These Wayfair layoffs will also result in 19% of its corporate workers no longer having jobs with the furniture e-commerce business.
Wayfair is expecting the layoffs to result in $70 million to $80 million in costs connected to severance a benefits. These charges will mostly be contained to the first quarter of 2024. However, the job cuts are expected to provide the company with annual cost savings of more than $280 million.
Reasons for the Wayfair Layoffs
Wayfair CEO, co-founder and co-chairman Niraj Shah said the following about the layoffs:
“While today’s actions will bolster our Adjusted EBITDA roadmap, I am increasingly focused on generating Adjusted EBITDA in excess of equity-based compensation as well as capital expenditures, and intend to drive meaningful improvements here quickly. We believe that what matters is maximizing our Free Cash Flow while simultaneously tightly controlling and ultimately reducing total share count, and are treating this as our north star.”
It also bears mentioning that Wayfair was among the companies that increased hiring during the Covid-19 pandemic. The company has been scaling back since then, with this being the third round of job cuts since the summer of 2022.
W stock is up 14.1% as of Friday morning.
Investors looking for more of the latest stock market stories will want to stick around!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
