Wayfair (NYSE:W), the e-commerce retailer who has stolen market share from home furnishings giants in recent years, is putting the brakes on its rapid expansion efforts. The company has told employees that it is cutting over 500 jobs and looking for more ways to reduce expenses, according to the Boston Globe.
The newspaper quoted CEO Niraj Shah, who said in an email that the company had overextended itself in recent years as it quickly entered new sales categories and launched in geographies outside of the U.S.
"This last period of investment went on too long," Shah said in the email. "Through two years of aggressive expansion, we have no doubt built some excess, inefficiency, and even waste at times, in almost every area," Shah continued.
The announcement implies that Wayfair will have bad news to report in its upcoming holiday-season earnings report on Feb. 28. Investors have been bracing for a modest growth slowdown, along with continued losses, for the seasonally critical fourth-quarter. Yet Wayfair's cost-cutting shift suggests the retailer faced surprisingly strong competitive challenges in late 2019 and into early 2020.