February 17, 2020
On Thursday, the online furniture seller Wayfair announced it will cut 550 jobs, thereby reducing by 3 percent its worldwide workforce of 17,000. Boston, where the company is headquartered, will be hardest hit. Nearly 6% (350) of the company’s Boston-based positions will be eliminated. In a public statement, the company explained the decision to streamline its workforce: "We continually evaluate the needs of the business.''
Wayfair, founded in 2002, has achieved dramatic topline growth as consumers have become increasingly comfortable making major purchases online. Between fiscal years 2014 and 2018, the company saw its revenue expand more than fivefold, from $1.3 to $6.8 billion. But despite that impressive sales growth, Wayfair has failed to achieve profitability, largely due to continuing high spending on product shipping costs and advertising in particular, required to stave off fierce competition from Amazon and others.
Over that same time period – fiscal years 2014 through 2018 – the company reported EBITDA margins (earnings before interest, taxes, depreciation and amortization, as a percentage of total revenue) of -10, -2, -4, -3 and -5 percent. Wayfair stock currently trades at less than half of its 52-week high.
Other major U.S. retailers have recently announced similar cost-cutting moves as they continue to adjust to fundamental changes that have transformed retailing. Both Kohl’s and Macy’s, for example, made announcements earlier this month. Kohl’s says it will eliminate about 250 positions in a corporate restructuring, and Macy’s will cut 2,000 jobs (9% of its workforce) and close more than 100 stores over the next three years.
This Ecommerce industry news update is presented by the Butcher Block Co. – a leading online seller of kitchen furniture and cooking accessories. The company is considered the destination site for those shopping for wood countertops or a kitchen cart featuring a butcher-block top.
For more information, please visit Butcher Block Co.
Name: Kathleen Grodsky
Organization: Butcher Block Co.
Address: 10448 N 21st Pl Phoenix, Arizona 85028
Phone: (877) 845-5597