Wayfair (W) to Save ~$100M on Workforce Reduction - Needham & Company

Needham & Company analyst Anna Andreeva reiterated a Buy rating and $100.00 price target on Wayfair (NYSE: W) after the company announced a workforce reduction involving approximately 870 employees (5% of global workforce, 10% of the corporate team) as part of previously announced plans to manage Opex and realign investment priorities.

The analyst commented, "This is part of the effort to manage expenses better towards driving profitability as the company reduces management layers and drives out duplication; in addition to making "substantial reductions" in the party labor costs announced in this morning's 8-K, we expect additional savings as part of this expense reduction initiative.

We calculate 5% reduction = $100M-$110M in lower Opex, which should help drive Adj EBITDA closer to breakeven in '23; this is also higher than the 3% workforce reduction pre-pandemic. The company will incur $30M-$40M of severance and benefit costs mostly in 3Q22--which we expect to be one time items and backed out by the Street."

For an analyst ratings summary and ratings history on Wayfair click here. For more ratings news on Wayfair click here.

Shares of Wayfair closed at $71.34 yesterday.

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