Online furniture retailer Wayfair has announced that it would cut 550 jobs worldwide, with around 350 in Boston Headquarters. The announcement has been made as the company’s chief executive officer acknowledged that the home retailers had grown too swiftly and become less efficient. The development comes after the company has doubled its workforce in the past two years. “We are at a point where we are investing in several different areas with an uneven speed of execution, chief executive officers Niraj Shah said. Shah said that the company has built some excess and inefficiency in almost every field.
The company has stated that the job cuts are not severe as it will affect only 3 per cent of its 17,000 employees. Employees who are set to lose their jobs have been notified by mails. They were called to conference rooms in groups of over 50 people and informed about the major organizational restructuring. While some employees said that they have been told about four weeks’ severance, Wayfair has not made any detail public in this regard.
Wayfair has failed to turn a profit despite its revenue soaring 37.5 per cent to USD 6.6 billion in three quarters of the last year. Executives of the company said that Wayfair has been in growth mode despite a prolonged track record of losses. Wayfair has been investing big time in its European expansion and supply chain. While board members talk about Amazon as a model, critics argue that shipping furniture is way more difficult than selling boots and books. Moreover, Amazon is projecting itself as one of the biggest online competitors of Wayfair.
Some believe that Wayfair is not facing any cash crunch and decided to lay off employees to appease Wall Street. The company has already stated that the cuts will in no way affect its new service center in Pittsfield. Wayfair received state subsidies of USD 31.4 million in 2018 to open the center. Meanwhile, employees received a mail stating that some internal systems had been locked to allow engineers to make significant data changes and deploy code.