Wayfair just axed 13% of its workforce, weeks after its CEO warned staff against laziness

Despite the fact that Wayfair, per an email co-founder and CEO Niraj Shah sent to “Wayfairians” announcing the news, has been “consistently profitable” and is “gaining market share at a fast pace,” the cuts were necessary to establish a “clean organizational model.” 

“I want to say thank you to the 1,650 team members who will be leaving us today,” Shah wrote. “You are all valued and talented individuals, and you have each made incredible contributions to Wayfair and our customers.” He regrets the impact the layoffs will have, he added, and will be offering severance. 

The reason for the layoffs, Shah wrote, is because Wayfair “went overboard in hiring during a strong economic period,” which gradually led it away from its “core principles.” By 2019—five years after going public—Wayfair suffered from “lack of focus: Too many good ideas led to too few getting done.” That led to the company’s first round of layoffs in February 2020. Two more would follow in 2022 and 2023. 

While those layoffs were challenging, Shah doesn’t regret them, saying he found that “after each reduction, we have gotten more of our goals done faster.” That’s what pushed him towards layoffs once again.

“In many ways, having too many great people is worse than having too few,” he wrote, arguing that a bloated workforce causes inefficiency, poor coordination, and investments in “lower return activities.” The company is currently struggling with each of those, “and [that’s] what we need to end.”

Work at all costs

If that email seems a bit brusque, it’s nothing compared to Shah’s email last month to employees, in which he essentially galvanized them to keep working tirelessly—eschewing work-life balance—despite strong stock performance and a return to…