The company said in a regulatory filing that the cuts will help it “manage operating expenses and realign investment priorities.” Shares fell about 14% in early trading Friday.
“We were seeing the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth,” Shah wrote. “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.”
Wayfair had flourished at the beginning of the pandemic, when demand for swanky furniture and other home decor upgrades was so hot that it broke global supply chains and caused lengthy shipment delays.
But fast forward two years, and the picture looks a lot different now.
Sales declined 15% year-over-year for the second quarter. The brand also lost 24% of its active customers — a sign that the company is struggling to retain the shoppers it gained at the beginning of the pandemic. overall, Wayfair posted a net loss of $378 million during the quarter.
Wayfair’s shares have lost about 70% of their value since the start of the year.
The layoffs will cost Wayfair between $30 million to $40 million for employee severance and benefits, a charge the company said it expects to take in the third quarter.
— CNN Business’ Nathaniel Meyersohn contributed to this report.