Wayfair Inc. shares ended Friday’s session up 10.3% after the home-goods retailer announced a workforce reduction of approximately 1,650 employees. The cuts represent about 13% of the company’s global workforce and 19% of its corporate team as of Dec. 31.
The Wall Street Journal reports that the cuts come just weeks after the company’s CEO, Niraj Shah, sent a memo to staff asking them to work harder. The memo subsequently went viral.
In a statement released early Friday, Wayfair
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said that its workforce-realignment plan is expected to deliver annualized cost savings of more than $280 million.
“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,” Shah said in the statement. “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.”
“To our colleagues departing Wayfair, I want to thank you for your incredible contributions to Wayfair and to our customers,” the CEO added. “You have so much to be proud of. I truly regret the impact this will have on you.”
Wayfair reported a narrower-than-expected loss in its third-quarter results in November, although the company’s revenue fell short of analysts’ expectations. In a statement released at the time, Shah noted a “turbulent macro” environment, but said Wayfair is committed to its profitability goals “in good times and bad.”
In November 2022, Wayfair was added to the list of “zombie” stocks compiled by the independent equity research firm New Constructs. The research firm, which uses machine learning and natural language processing to parse corporate filings and model economic earnings, warned of tough times ahead for Wayfair.
Retail layoffs are in the spotlight at the moment. Macy’s Inc.
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plans to cut 2,350 jobs and close five stores, the Wall Street Journal reported Thursday. The cuts amount to around 13% of the department-store chain’s corporate staff and 3.5% of the company’s overall workforce, excluding seasonal hires, the report said.
A Macy’s spokesperson told MarketWatch on Thursday that the store closures were part of an effort to “reposition our store portfolio and evaluate the right mix of on- and off-mall locations.” The spokesperson added that the five stores would close this year.
Macy’s had 784 stores as of Oct. 28, including the retailer’s namesake locations as well as those of Bloomingdale’s, which Macy’s owns. Shares of Macy’s ended Friday’s session down 1.7%.
Wayfair shares are up 20% in the last 52 weeks, while Macy’s shares are down 22.5%, compared with the S&P 500 index’s
SPX
gain of 21.8%.
Bill Peters and Steve Gelsi contributed.
Related:
Macy’s to lay off 13% of corporate staff and close five stores, as more retailers attack margin concerns with tech
Wayfair stock falls as revenue falls short despite narrower-than-expected loss
Wayfair added to ‘zombie’ stocks list by equity research firm New Constructs
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