BOSTON, MA - JULY 31: Wayfair employee Jay deVeer, 3D artist, works at his desk at the Boston headquarters of Wayfair on July 31, 2018. 

Weeks after Wayfair CEO Niraj Shah sent a memo days before Christmas last year pushing for his workers to work “long hours” and blend together work and life, the executive has just made a major cost-cutting decision that resulted in 1,650 employees losing their jobs.

In a leaked memo sent to employees on Jan. 18, Shah claims that despite recent efforts, the company does not have a healthy foundation.

Related: Wayfair CEO sends a harsh wake-up call to employees

“Although we’ve taken important steps to get ourselves optimized to win and fit for the future, the reality is they have not gotten us to where we need to be, which is to have a clean organizational model that provides a healthy foundation to grow from,” wrote Shah.

Shah then tells employees in the email that the current reality of the company is due to over-hiring, which has led to the company cutting 13% of its workforce.

“The natural question is to ask ‘Why?’ I think the reality is that we went overboard in hiring during a strong economic period and veered away from our core principles, and while we have come quite far back to them, we are not quite there,” he wrote.

The CEO also stated in the email that “having too many great people is worse than having too few.”

“With too few, you get a lot done quickly, but you may not get everything done that you want,” he wrote. “But having too many causes inefficiency, coordination costs, and investments in lower return activities. That is what we have been experiencing and what we need to end.”

Shortly after Shah coordinated the layoffs at the company, Wayfair’s stock was up more than 8% at last check after the opening bell Friday after jumping more than 15% pre-market.

The last time Wayfair did mass layoffs was in January last year when it announced that it was cutting 10% of its workforce, which is 1,750 jobs. It has also been reported that the company has also been quietly laying off its employees in small quantities several times after their large January restructuring.

Wayfair joins a plethora of tech companies this year that have been laying off their workforce en masse. Currently in 2024, 58 tech companies have laid off their employees, resulting in 7,785 people losing their jobs, according to recent data from Layoffs.fyi.

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