Wayfair is expanding its hiring in India at the same time as it is cutting 1,750 jobs, more than half of them in the Boston area, as part of a $1.4 billion cost-savings plan.
The Indian workers will staff a new technological development center Wayfair is opening in Bengaluru early this year. The online home goods retailer planned to hire 100 engineering contractors in Bengaluru last year with the aim of converting them to Wayfair employees in 2023 amid “a transition to direct hiring in Q1 2023,” according to an internal company document obtained by the Globe.
In October, Wayfair hired Rohit Kaila, a top Walmart tech executive based in Bengaluru, to oversee the new center. Kaila was vice president of engineering at Walmart for five years and worked previously for Intuit and Yahoo in Bengaluru.
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Wayfair’s expansion in India at the same time it is cutting US jobs revives the decades-old debate about technology companies moving jobs offshore. The trend could spread as tech companies face pressure from the slowing economy and lower stock prices. Shifting jobs abroad also could be easier amid the pandemic era’s emphasis on remote work.
“When the pandemic hit, a lightning bolt struck the routines of work for everyone,” said Peter Norlander, a professor at Loyola University Chicago who has studied offshoring. “People started imagining new opportunities and that brings new demands and pressures. For owners and managers, they could start to think about work being done from anywhere.”
“There are a lot of reasons for jobs moving to other countries, it goes beyond just a labor cost arbitrage,” Norlander added. “It’s also about the availability of skills in high demand and finding younger workers.”
With the slow economy and many other tech companies cutting jobs, the trend could grow, RAND Corp. associate economist Tobias Sytsma said. “There’s a possibility that we’re on the cusp of a new wave of globalization,” Sytsma said. “There are very few international trade barriers to prevent services from moving.”
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But Wayfair said it was not shifting any jobs from the US to India and decided to open the Bengaluru center early last year, before the cost-cutting plan was under consideration. In 2021, Wayfair announced it was opening technological development centers in Austin, Toronto, and San Francisco and would add up to 200 workers at each one.
“Like these locations in North America, Bengaluru is a well-established technology hub with an exceptional talent pool,” the company said in a statement to the Globe. “The TDCs are part of the company’s long-term talent strategy to expand its footprint to global technology hubs in order to continually hire the brightest talent.”
Wayfair’s recent job cuts went beyond the ranks of sales and HR workers and included many more technical positions. Almost 200 people with engineering roles in their job title were cut in Boston, including 35 senior engineers and 23 senior software engineers, according to a document Wayfair filed with the state.
Deep cuts hit Wayfair’s “engineering effectiveness” team, in Boston and elsewhere, which maintains the company’s cloud-hosted servers and software development tools.
“Effective immediately, everything Engineering Effectiveness owns and operates will go into KTLO (Keep the Lights On) mode,” one engineer informed colleagues in an internal Slack message viewed by the Globe. “This means we will only spend effort on keeping critical systems operational.”
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Wayfair said it would be able to maintain its systems even with the cuts.
“As part of our reorganization to be more agile, we have prioritized certain workstreams over others that will help strengthen the business in the near term,” the company said in a statement. “Over time we will reassess our priorities and resources to continue to grow our business.”
Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him on Twitter @ampressman.