Dive Brief:
- Wayfair on Friday announced it laid off 340 employees from its technology team and plans to close its Technology Development Center in Austin, Texas. The retailer will maintain Technology Development Centers in Seattle; Boston; Mountain View, California; Toronto; and Bengaluru, India.
- The job cuts come after the online home goods retailer achieved a number of tech goals over the past five years, the company said in a blog post.
- Wayfair expects to incur aggregate charges between $33 million and $38 million related to severance, benefits and transition costs, the majority of which will be paid out to those affected over the next 12 months. The charges do not include noncash charges associated with equity-based compensation.
Dive Insight:
Wayfair has been working to modernize its tech, including through a replatforming and migration to the cloud.
“This journey required significant investment, dedication, and the collective effort of our talented technology teams,” the company said. “We now operate on a modern, scalable, and high-performance infrastructure designed to adapt to the evolving needs of our customers and business.”
The layoffs and tech center closure are a way to streamline the business and ensure “long-term success,” Wayfair said on Friday. The company said it will continue to improve its tech — with a focus on personalization and simplifying navigation — to better the shopping experience and drive growth within the business.
The company also said it will be harnessing generative AI to drive productivity and efficiency. On the consumer-facing front, Wayfair last month launched Muse, a generative AI tool that allows consumers to be inspired by AI imagery and shop for recommended products from the retailer.
Friday’s announcement also marks the second round of job cuts from the company since the start of the year. Wayfair in January announced it was exiting its operations in Germany, affecting about 730 jobs. However, the company at the time said about half of those positions would be relocated to other corporate offices. That comes on top of rounds of layoffs impacting thousands of positions over the past several years.
Wayfair continues to face challenges related to declining demand in the home sector of retail overall. In its latest quarter, the retailer reported fourth-quarter net revenue was nearly flat — up 0.2% from the year-ago period — to $3.1 billion. Wayfair, however, narrowed its losses during the quarter, with operating loss improving 32% and net loss contracting 26%.