(Reuters) -Wayfair said on Friday it would lay off about 1,650 employees and expects annual cost savings of more than $280 million from the move, sending the online furniture retailer’s shares up 16% before the bell.
The Boston-based firm is the latest in a list of companies ranging from Citigroup to Amazon.com to announce multiple rounds of layoff within a year as they aim to trim costs at a time when consumer spending remains weak.
Wayfair, which announced 13% reduction in its global workforce on Friday, said it now expects to deliver over $600 million of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2024. Analysts on average expect $479.3 million, according to LSEG data.
“Persistent category weakness makes revenue growth challenging,” CEO Niraj Shah said.
“Although we’ve taken important steps to get ourselves optimized to win and fit for the future, the reality is they have not gotten us to where we need to be,” Shah said in a note to employees.
The company has been taking cost-savings initiatives since August 2022, in a bid to operate more efficiently. Last year, it said it would cut 1,750 jobs, or about 10% of its workforce.
Wayfair had a global workforce of about 17,505 employees as of the end of 2022, according to a 2023 proxy statement.
It expects about $70 million-$80 million of costs, consisting primarily of employee severance and benefit costs, most of which would be recorded in the first quarter of 2024.
(Reporting by Granth Vanaik in Bengaluru; Editing by Savio D’Souza and Shinjini Ganguli)
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