COMP NEWS – Wayfair has announced that it will lay off more than 1,600 employees, marking the company’s third consecutive year of trimming its workforce after a period of zealous overhiring in 2020.

Wayfair is laying off 1,650 employees, amounting to 13% of its global workforce, as the online home goods retailer struggled to rebound following its success amid pandemic lockdowns.

CEO Niraj Shah, who recently went viral for telling his employees to work harder, said in an open letter posted Friday that Wayfair “went overboard in hiring during a strong economic period,” referencing 2020 when online shopping spiked, sparking a “dramatic surge” in demand that doubled Wayfair’s sales to $18 billion.

A few years later, its fortunes have changed, with Shah writing that mid-2022 “was clear we were in a bust period” and Wayfair implementing rounds of layoffs in 2022 and 2023.

“I believe we need to stay focused as a company on what committed small teams can accomplish,” Shah wrote Friday. “In many ways, having too many great people is worse than having too few.”

Nearly 20% of the layoffs will be on the corporate team, with the total job reductions saving Wayfair an estimated $280 million annually.

All workers will receive an email Friday about their future with the company and severance will be offered to those affected.

The Boston-based company had about 14,000 employees as of 2023. Shares of Wayfair (W) soared nearly 16% in premarket trading.

To read more about Wayfair’s layoffs, click here.

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