Wayfair to cut 13% of workforce, shares surge

Wayfair surged on Friday as the online home retailer announced plans to cut around 13% of its global workforce in a bid to save more than $280m.

The company will axe around 1,650 employees, which includes 19% of its corporate team.

Chief executive Niraj Shah said: "The changes announced today reflect a return to our core principles on resource allocation, such as getting fit on spans and layers as well as focusing on our highest priorities.

"As a result, we're reducing team sizes across the organisation, as well as reducing seniority in certain roles that we plan to rebuild with modified levelling over the course of this year."

Shah said that while the actions will bolster the retailer’s adjusted EBITDA roadmap, he is increasingly focused on generating adjusted EBITDA in excess of equity-based compensation as well as capital expenditures, and plans "to drive meaningful improvements here quickly".

"We believe that what matters is maximizing our free cash flow while simultaneously tightly controlling and ultimately reducing total share count, and are treating this as our north star," Shah said.

Wayfair said that based on Friday’s announcement, "in a hypothetical flat revenue environment" and inclusive of the rebuilt roles, it now expects to deliver more than $600m of adjusted earnings before interest, taxes, depreciation and amortisation in 2024.

At 1315 GMT, the shares were up 13% at $57.47.