The Friday trading session saw the trading price of Wayfair’s shares jump significantly. The shareholders rejoiced as they saw the retail giant’s share prices surge more than 20%.
Shares Jumped Tremendously
The share prices for the retail giant recorded a major boost on Friday as the company announced plans of laying off employees.
According to the company officials, they have decided to let go of 1,750 of their total employees. This is 10% of the global workforce the company has.
The company had recently revealed that they were recording a great surge in costs. The costs of operations were rising tremendously so they wanted to do something about it.
They seem to have come up with a solution and that is by reducing their workforce. The company has decided that it will be laying off almost 2,000 of its total employees.
Second Wave of Layoffs
With the initiation of the layoff phase, the company will have launched its second wave of layoffs. Yes, this is the second time the company has laid off employees.
The first time the company announced laying off employees were back in the month of August. At that time, the retail giant had announced a 5% employee reduction.
According to the company executives and workforce managers, the company will be able to save up a lot on costs in a single year.
As per their estimates, they will be able to save up somewhere around $750 million in a single year. It is a huge reduction in costs but it has come at the cost of the company losing its workforce.
Regions of Layoffs
Company officials have confirmed that the layoffs will be on a global level. Therefore, every region where they have their services and chains spread out will suffer from the wave.
Wayfair has also initiated its layoffs in the European region. The next region they are going to target is North America.
The employees in the North American region will start receiving notices of termination from coming Friday. Their employment statuses will be confirmed and the employees to be laid off will be informed accordingly.
Letter Written by Niraj Shah
The company’s co-founder and CEO wrote a letter to all of his employees about the latest decision their company had to make.
He let all of the employees about the market conditions and other challenges they have been facing for a while. He thanked every employee for their support and contribution to the company’s success.
Shah added that if their company had any other option, they would have gladly picked it over what they have been forced to do.
They are sorry for what they are forced to do but there was no other choice for them. The email letter was sent to all of the employees based in any branch or chain of Wayfair across the globe.
Shah added that based on the circumstances of each employee, they will proceed with offering them severance. The circumstances will be based on their level, tenure, and country rules.
The company has revealed that they have allocated a huge figure towards the benefits and severance they are going to offer their employees.
They have estimated that the costs for the benefits and severance would go somewhere around $68 million to $78 million. They are planning to proceed and finalize the layoffs by the end of the first quarter of 2023.
Wayfair, which gained quite prominence as one of the largest revenue generators throughout the pandemic is now faced with major financial issues.
It had become the top choice for consumers wanting to add new furniture to their homes during the pandemic.
Now that the pandemic is over, people have started to go back to the old ways of spending and consuming products. Therefore, the company has seen a great decline in demand for its products and services across the board.
The company hopes that reducing costs will help it through difficult times and help it increase its business again.