Wayfair profit down despite homeware giant laying off more than a quarter of staff

The UK arm of online homeware retailer Wayfair has seen its profit dip despite cutting around 30 per cent of its workforce in a bid to save costs, newly-filed documents have revealed.

The company, which sells furniture and homeware through its website, saw its pre-tax profit fall to £2.6m in 2023, down from £2.7m in the previous 12 months.

This was despite the business slashing its average number of employees per month from 847 to 587 during the year, with around 260 people being made redundant.

As a result the group reduced its payroll costs from £46.8m to £41.8m for the 12 months.

Wayfair, whose American parent company has laid off thousands of US employees in the past couple of years, also saw a decline in its turnover, which dipped to £69m during the year, down from £83m in 2022.

In a statement published to Companies House Wayfair said: “The strategy of the company is to maintain its warehouse and fulfillment services operations in the UK to drive Wayfair Stores Limited’s European growth.

“This will increase the underlying operating expenses, while also increasing revenue and operating profit in the coming years.

“The risk that anticipated growth within European economies continues to be negatively impacted by uncertainty in Europe, particularly due to the ongoing situation in Ukraine and the cost of living.

“The risk is mitigated through the combination of a competitive pricing structure, extensive affordable brand selection and high service levels to our customers.

“There is a particularly strong emphasis on achieving and maintaining high levels of customer services which distinguishes the company from its competitors.

“During a difficult macroeconomic environment, we remain squarely focused on our customers and our suppliers, and on making sure Wayfair is their preferred platform for customers for the purchase of homeware goods and furnishings.

“We are tightly controlling our many levers and steering Wayfair in a financially responsible manner through this period.”

Job cuts at Wayfair parent company

The Wayfair parent company, which was founded by CEO Niraj Shah in 2002, announced in January it would lay off 1,650 employees – around 13 per cent of its workforce.

The company said the job cuts, which affect 19 per cent of its corporate employees, would lead to annual cost savings of $280m (£217m).

Shah said at the time of the announcement: “We went overboard in hiring during a strong economic period and veered away from our core principles.

Boston-based Wayfair announced rounds of layoffs in 2022 and 2023. In last year’s cuts it shed 1,750 jobs – about 10 per cent of its workforce.

The company had a global workforce of about 17,505 employees as of the end of 2022, according to a 2023 proxy statement.