Online retailer Wayfair announced on Friday its second round of layoffs in less than six months, with a plan to cut 1,750 jobs, or 10 percent of the company’s workforce. That includes 937 people who work in Boston or work remotely and report to managers in Boston.
Combined with the 870 jobs cut in August and other spending reductions, Boston-based Wayfair said it would be saving $1.4 billion on an annual basis in an effort to return the company to profitability.
Although Wayfair’s sales of home goods and furniture on its website spiked early in the pandemic, consumers have since shifted their dollars more to shopping at physical stores and categories such as travel and leisure. Sales decreased by 13 percent to $9.1 billion in the first nine months of 2022 compared to a year earlier and analysts expect fourth quarter sales dropped by about 8 percent.
Chief executive and cofounder Niraj Shah admitted to over-hiring in an e-mail to all employees on Friday.
“We thrive when we are scrappy and dedicated to customer outcomes,” Shah wrote in the e-mail, which was obtained by the Globe. “Unfortunately, along the way, we over complicated things, lost sight of some of our fundamentals and simply grew too big.”
Shah said sales trends in December improved from November. “Business momentum continues to strengthen,” he wrote.
Among the people losing their jobs on Friday, 1,200 were in corporate positions, representing almost one in five of Wayfair’s corporate workforce. The company plans to have fewer layers of management and will trim the ranks of its recruiting, supply chain, and customer service divisions, Shah said in the e-mail. Other cost-cutting efforts will hit advertising, insurance, software licensing, and janitorial services.
US workers will get at least 10 weeks of severance pay, while benefits coverage and equity vesting will continue through March.
Wayfair’s stock price has lost 75 percent over the past year, including a 5 percent decline on Thursday. The stock jumped 6 percent in pre-market trading on Friday after the layoff announcement.
The layoffs follow cutbacks at many other tech companies, led by giants like Microsoft, Amazon, and Meta. In the Boston area, numerous companies have followed the same pattern as Wayfair, announcing a round of job cuts only to come back months later with another cut.
Cybersecurity company Snyk cut 5 percent of its workforce in July and another 14 percent in October, for example. Notarize and Cybereason made cut jobs in June and again in October. And Whoop cut jobs in July and again this month.