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Wayfair Inc. shares rose 15.9% in premarket trades Friday after the home goods retailer announced a workforce reduction involving approximately 1,650 employees. The cuts represent approximately 13% of the company’s global workforce and approximately 19% of its corporate team as of Dec. 31, 2023.
In a statement released early Friday, Wayfair
W,
said that its workforce-realignment plan is expected to deliver annualized cost savings of more than $280 million.
“While today’s actions will bolster our Adjusted EBITDA roadmap, I am increasingly focused on generating Adjusted EBITDA in excess of equity-based compensation as well as capital expenditures, and intend to drive meaningful improvements here quickly,” Wayfair CEO Niraj Shah said in the statement. “We believe that what matters is maximizing our Free Cash Flow while simultaneously tightly controlling and ultimately reducing total share count, and are treating this as our north star.”
Retail layoffs are in the spotlight at the moment. Macy’s Inc.
M,
plans to cut 2,350 jobs and close five stores, the Wall Street Journal reported Thursday. The cuts amount to around 13% of the department-store chain’s corporate staff and 3.5% of the company’s overall workforce, excluding seasonal hires, the report said.
Related: Wayfair stock falls as revenue falls short despite narrower-than-expected loss
A Macy’s spokesperson told MarketWatch Thursday that the store closures were part of an effort to “reposition our store portfolio and evaluate the right mix of on- and off-mall locations.” The spokesperson added that the five stores would close this year. Macy’s had 784 stores as of Oct. 28, including the retailer’s namesake locations as well as those of Bloomingdales, which Macy’s owns. Shares of Macy’s rose 0.4% in premarket trades Friday.
Wayfair shares are up 8.8% in the last 52 weeks, while Macy’s shares are down 21.2%, compared with the S&P 500 index’s
SPX
gain of 22.6%.
Bill Peters contributed.
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