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Wayfair, the online homeware retailer, has experienced a decline in pre-tax profits, despite implementing significant staff reductions to cut costs, according to newly filed documents.
The UK branch of Wayfair reported a decrease in pre-tax profit to £2.6 million in 2023, down from £2.7 million the previous year. This decline occurred despite the company reducing its workforce by approximately 30 per cent, cutting around 260 jobs and lowering its average monthly employee count from 847 to 587.
As a result of these layoffs, the company managed to reduce payroll expenses from £46.8 million to £41.8 million over the 12 months.
Wayfair, whose American parent company has also faced substantial layoffs in recent years, saw its turnover decline to £69 million, down from £83 million in 2022. These cost-cutting measures came amid rising administrative expenses.
In a statement published on Companies House, Wayfair stated its strategy to maintain warehouse and fulfilment services in the UK as part of its plan to drive European growth for Wayfair Stores Limited. The company acknowledged that this approach would increase underlying operating expenses while aiming to boost revenue and operating profit in the coming years.
The statement also noted the risks posed by ongoing uncertainty in European economies, particularly due to the situation in Ukraine and the rising cost of living. Wayfair aims to mitigate these risks through competitive pricing, a broad selection of affordable brands, and a strong emphasis on high customer service levels to distinguish itself from competitors.
During these challenging macroeconomic conditions, Wayfair remains focused on ensuring its platform remains the preferred choice for homeware goods and furnishings by maintaining close relationships with customers and suppliers and steering the company in a financially responsible manner.
Job Cuts at Wayfair Parent Company
In January, Wayfair’s parent company, founded by CEO Niraj Shah in 2002, announced plans to lay off 1,650 employees, approximately 13 per cent of its workforce, as part of a strategy to achieve annual cost savings of $280 million (£217 million). Shah acknowledged that the company had over-hired during a strong economic period, deviating from its core principles.
In addition to the 2023 layoffs, Boston-based Wayfair had already shed 1,750 jobs, about 10 per cent of its workforce, in 2022. As of the end of 2022, Wayfair had a global workforce of approximately 17,505 employees, according to a 2023 proxy statement.
