Wayfair cutting 5% of global workforce

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Wayfair Inc. is cutting hundreds of jobs as it seeks to become more profitable, the retailer said on Friday.

Approximately 870 jobs will be cut. This represents 5% of its global workforce and 10% of its corporate teams, the company said. 

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WWAYFAIR INC.59.26-12.21-17.08%

Wayfair CEO Niraj Shah told employees in a note Friday that he overestimated e-commerce growth in the home category and takes responsibility for the layoffs. 

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"We were seeing the tailwinds of the pandemic accelerate the adoption of ecommerce shopping, and I personally pushed hard to hire a strong team to support that growth," Shah said. "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."

The Wayfair Inc. website on a laptop computer arranged in Saint Thomas, Virgin Islands, U.S., on Thursday, Feb. 18, 2021.  (Gabby Jones/Bloomberg via Getty Images / Getty Images)

As part of its process to get back on track this fall, Shah said the company is thinning out management, better aligning its work with its strategic priorities and adjusting areas that have grown faster than its "current revenue trajectory can support." 

Wayfair expects the layoffs to cost the company between about $30 million and $40 million for employee severance and benefit costs. It expects to incur these costs in the third quarter of 2022. 

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Products are displayed at Wayfair’s first store in the Natick Mall in Natick, MA on Aug. 20, 2019. (Suzanne Kreiter/The Boston Globe via Getty Images) / Getty Images)

Earlier this month the Boston-based furniture giant reported a loss of $378 million in its second quarter.

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The Associated Press contributed to this report. 

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