To streamline operations and adapt to evolving market dynamics, online furniture retailer Wayfair is set to cut approximately 1,650 jobs, or 13% of its global workforce. This restructuring is part of Wayfair’s ongoing efforts to realign its staffing levels after layoffs in January of the previous year, where 1,750 employees were affected, and additional job cuts in August 2022 and 2020.
Wayfair’s CEO and co-founder, Niraj Shah, highlighted the necessity of returning to the company’s core principles and acknowledged that the previous hiring surge during a robust economic period had led them astray.
The latest round of job cuts is expected to yield annualized cost savings exceeding $280 million for Wayfair. The company foresees restructuring costs of approximately $70 million to $80 million, primarily allocated to employee severance and benefits, with the majority anticipated in the first quarter of 2024. Shah expressed the company’s commitment to rebuilding with modified leveling throughout the year.
In tandem with Wayfair’s announcement, iconic department store Macy’s revealed plans to lay off around 2,350 employees, or approximately 3.5% of its total workforce. As part of its strategic realignment to meet evolving consumer needs, Macy’s will shutter five locations, including stores in Arlington, Virginia; San Leandro, California; Lihue, Hawaii; Simi Valley, California; and Tallahassee, Florida. According to sources familiar with the matter, the layoffs are scheduled for January 26.
Macy’s has faced previous workforce adjustments during the early days of the pandemic, with significant layoffs in June 2020, affecting 3,900 corporate staffers. In February 2020, just before the pandemic declaration, the company announced 2,000 job cuts in its corporate office and the closure of 125 stores.
The business landscape has witnessed workforce reductions across various industries, including retail, technology, media, and hospitality, with recent months seeing layoffs at notable companies such as Google, Amazon, Hasbro, and LinkedIn. Following these announcements, Macy’s stock experienced a 3% decline, while Wayfair shares saw an increase of over 7% on Friday.
These strategic adjustments by Wayfair and Macy’s reflect a broader trend as businesses navigate changing consumer behaviors, market conditions, and economic uncertainties, aiming to ensure long-term sustainability and adaptability in the competitive landscape.
