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Wayfair Cutting Workforce by 900
Staff Reports, iBerkshires
04:59PM / Friday, August 19, 2022
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PITTSFIELD, Mass. — Wayfair is reducing its workforce by nearly 900, with more than a third of those reportedly at its Boston headquarters after a disappointing second-quarter report. 
 
The online home decor company hasn't further detailed where the rest of the cuts will come or how the Pittsfield customer service center will be affected. The retailer had close to 9,000 workers in Boston and close to 16,000 internationally. 
 
Total revenue for Wayfair was down about 15 percent over last year at this time and U.S. revenue down about 10 percent, or $302 million, for a net loss of $378 million. The company is projecting a further decrease in profit in the third quarter but expects an uptick over the holiday season. The figures were reported to shareholders on Aug. 4. 
 
"We were seeing the tailwinds of the pandemic accelerate the adoption of ecommerce shopping, and I personally pushed hard to hire a strong team to support that growth," Wayfair CEO and co-founder Niraj Shah wrote in an open letter to employees. "This year, that growth has not materialized as we had anticipated. Our team is too large for the environment we are now in, and unfortunately we need to adjust."
 
About 300 people are employed at the call center that opened in 2019 in the Clock Tower Building. Shah, a 1991 graduate of Pittsfield High School wanted to include his hometown in the company's burgeoning business. 
 
In a call with investors in early August, Shah said 2022 was "proving to be a volatile year" in that consumers were being affected by "inflationary pressures as well as by economic and geopolitical concerns."
 
"For the last couple of years, we have indicated that Wayfair should now be at the scale to drive both growth and consistent profitability," he said. "The first half of this year has admittedly been less robust than expected, but let me be very clear that our intention is unchanged. We are laser focused on quickly getting back to this goal."
 
The pandemic had proved profitable for e-commerce as many people were working from home and sought to improve their surroundings. 
 
Compared to second quarter of 2021, the company saw its active customers decrease by 24 percent and delivery of orders decline by 28 percent. 
 
The average order, however, has increased from $278 to $330. 
 
"The pandemic changed the e-commerce landscape in many ways. But one thing that remains unchanged is the unique nature of our business, an end-to-end platform dedicated to the home category," Shah said. 
 
In terms of workforce, Shah wrote to employees that priorities are to thin out management layers, align work with strategic opportunities and adjust areas that have grown faster than revenue could support. Anyone affected would be receiving an invitation to meet with team leaders and would be provided a severance based on geography, tenure, level along with potentially other benefits. 
 
The company will also focus on meeting customers price points and styles, boosting sales and specials, ensuring inventory levels to prevent long lead times, and logistics. Wayfair is also moving forward with brick and mortar, with the first store opening this past May and specialty retail formats and a larger branded store in 2024.
 
"While we tighten our belt in some places, our support is fully behind high [return on investment] initiatives that will set us up for years to come," Shah told investors. 
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