A well-known North American e-commerce platform announced its third round of layoffs, this time involving 1,650 people

The layoffs of major e-commerce platforms in 2023 seem to be just yesterday, and a new round has begun in 2024...

Last Friday, Wayfair, an American home furnishing e-commerce platform, announced that it would lay off 13% of its global employees, reaching about 1,650 people. It is reported that after the announcement of layoffs, Wayfair (W.US)'s stock price rose by more than 10% last Friday.

During the COVID-19 pandemic, major e-commerce platforms have grown rapidly, and Wayfair is no exception. In particular, many countries have implemented home quarantine policies. In order to meet the comfort of home life, many consumers are more "generous" on home items such as furniture and decorations.

In a memo to employees on Friday, Niraj Shah, the platform's founder and CEO , said the company's annual sales have soared from $9 billion to $18 billion, a sign of how fast the platform is growing. To keep up with the pace of growth, the platform has also increased hiring.

However, as the impact of the epidemic has become less and less, consumers' demand for household goods has also begun to decline. In order to keep pace with the business volume and save costs, Wayfair needs to reduce its staff.

This reduction is also the third layoff implemented by Wayfair since August 2022, and the move is expected to save the company approximately $280 million.

"Since 2022, we have undertaken two significant corporate restructurings to right-size the company; each time we exercised our best judgment, determined the target costs we needed to achieve, and were confident that our sizing was correct," Shah said in the memo.

It is worth noting that in this round of layoffs, Wayfair will also cut some unnecessary management and leadership positions. In addition, Wayfair also stated that it plans to rebuild part of its workforce this year, but the focus will be on basic positions and positions at the executive level.

In addition to Wayfair, Etsy also announced last month that it would lay off 225 employees, including Chief Marketing Officer Ryan Scott. The reason given was that the total sales of goods had remained basically flat over the past two years, and despite cost-cutting measures, employee expenses continued to increase. However, Etsy's stock price did not rise, and its market value once evaporated by nearly $1 billion compared to before.

In addition to the North American market, other markets are also laying off employees. In the South Asian market, Walmart's Flipkart also announced earlier this month that it would reduce the size of its team by 5%-7% before March-April. In the past two years, the platform has laid off employees based on performance every year; Indian e-commerce platform Udaan also announced last month that it would lay off 100-120 employees, and the platform's valuation has plummeted by nearly 50% in recent days. In the Middle East market, eBay announced a 10% layoff in Israel.

Wayfair

Round 3

Layoffs