Online furniture retailer Wayfair Inc. plans to lay off about 870 employees as it looks to cut back its expenses.
The planned job cuts represent roughly 5% of Wayfair’s W,
Executives anticipate that Wayfair will incur about $30 million to $40 million in costs around severance, benefits, and other areas related to the layoffs. They expect to see “substantially all” of those expenses in the third quarter.
Shares of Wayfair are off more than 7% in Friday premarket trading.
Wayfair’s management team previously discussed plans to reduce expenses on the company’s second-quarter earnings call earlier in August, as Chief Executive Niraj Shah acknowledged it was “unmistakable that consumer behavior is being impacted by inflationary pressures as well as by economic and geopolitical concerns.”
He added that Wayfair’s “mass customers” were “being more deliberate about where their discretionary dollars are going,” given rising gas and grocery costs. Further, with pandemic conditions easing, some Wayfair customers have opted to shift more discretionary spending toward travel and away from “goods.”
The discussion jibed with commentary from Mastercard Inc. MA,
Wayfair’s Shah said on his company’s own earnings call that the retailer would be “increasing our cost efficiency focus across all facets” while “not trading off on important future growth drivers and enablers.”