Wayfair has laid off 340 employees from its technology team and announced the closure of its Technology Development Center in Austin, Texas. This move affects approximately 12% of its tech workforce and 2.5% of its total 13,500 employees.
The online home goods retailer will maintain Technology Development Centers in Seattle; Boston; Mountain View, California; Toronto; and Bengaluru, India.
Over the past five years, Wayfair has invested heavily in modernizing its technology infrastructure, including migrating to the cloud and utilizing artificial intelligence, enabling a complete replatforming. The company stated that these advancements have led to a “modern, scalable, and high-performance infrastructure designed to adapt to the evolving needs of our customers and business.”
The company expects to incur charges between $33 million and $38 million related to severance, benefits, and transition costs, the majority of which will be paid out over the next 12 months.
Despite these technological advancements, Wayfair continues to face challenges related to declining demand in the home sector. 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. However, Wayfair narrowed its losses during the quarter, with operating loss improving 32% and net loss contracting 26%.
This announcement marks the second round of job cuts from the company since the start of the year. In January, Wayfair announced it was exiting its operations in Germany, affecting about 730 jobs, though approximately half of those positions were relocated to other corporate offices.
Wayfair plans to continue enhancing its technology, focusing on personalization and simplifying navigation to improve the shopping experience and drive growth. The company also intends to harness generative AI to boost productivity and efficiency. Recently, Wayfair launched Muse, a generative AI tool that allows consumers to be inspired by AI imagery and shop for recommended products from the retailer.
By streamlining operations and refocusing resources, Wayfair aims to ensure its “long-term success” in a competitive market.