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Wayfair to lay off 870 employees worldwide

Aug. 19 (UPI) -- Online retailer Wayfair announced it is reducing its workforce by 870 employees as sales have slowed after pandemic highs.

In its regulatory filing, Wayfair said its workforce reduction represents 5% of its global workforce and 10% of its corporate team. The company's stock price plunged more than 14% Friday afternoon.

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"As a result of this workforce reduction, we expect to incur between approximately $30 million and $40 million of costs, consisting primarily of employee severance and benefit costs, substantially all of which we expect to incur in the third quarter of 2022," Wayfair said in a statement.

"The foregoing estimated amounts do not include any non-cash charges associated with stock-based compensation. These estimates are subject to a number of assumptions and actual results may differ materially."

In a letter to employees, Wayfair CEO said the layoffs were a "difficult decision" resulting from a slowdown in sales.

Last year, sales fell 3.1% after a 55% increase in 2020.

"We were seeing the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth," Shah wrote, according to CNN.

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"This year, that growth has not materialized as we had anticipated. Our team is too large for the environment we are now in, and unfortunately, we need to adjust."

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