E-commerce marketplace Wayfair Inc. said it’s freezing corporate hiring for 90 days, the latest pandemic winner to pause its plans for growth as businesses fret over a slowing economy.
Wayfair is in a “strong position,” a spokesperson said in response to a question about hiring. But the company sees “a great deal of uncertainty in the overall economy.” The Boston-based company has almost 17,000 full-time employees, according to regulatory filings.
Online retailers boomed during the pandemic with Wayfair and rival Amazon having no shortage of consumers ordering goods at home thanks to pandemic restrictions and unprecedented amounts of fiscal stimulus. That led Wayfair to report a 55 percent jump in revenue in 2020 to $14.1 billion in 2020 as demand boomed, but sales declined 3 percent to $13.7 billion in 2021.
The luster of pandemic winners like Wayfair and Canadian e-commerce platform Shopify is fading, with their shares declining more than 70 percent this year. Other tech companies, which are seeing their stocks pummeled amid an overall stock market decline fueled by concerns about rising inflation and interest rates, are also rethinking hiring plans.
Twitter announced a hiring freeze last week and Facebook parent Meta Platforms Inc. slowed its hiring pace in an effort to cut costs earlier this month. Even Uber, a company that’s never shied away from losing huge sums in the name of growth, is now issuing sober memos about “unit economics.”
In a recent call with analysts to discuss earnings, Wayfair chief executive Niraj Shah said that due to rising prices across retail and a “mix of troubling geopolitical events,” customers are more focused on where they are spending their money. Even with consumer spending on retail still climbing, “shoppers are nonetheless diverting a larger share of their wallets to non-discretionary categories and reprioritizing experiences like travel,” he said.
Wayfair reported a first-quarter loss of $319 million, compared with a profit of $18.2 million a year earlier. Revenue was $2.99 billion, down 14 percent and active customers decreased to 25 million compared with 33 million a year ago.
In the current quarter Wayfair said so far revenue is down in the mid-to-high teens compared with last year. Costs associated with labor, energy, and transportation will also weigh on margins, the company said.