This Wayfair Analyst Cuts Forecast After Workforce Reduction Announcement

Core Viewpoint - Wayfair Inc is experiencing a decline in shares following the announcement of a planned reduction in its technology workforce due to a replatforming initiative aimed at consolidating teams and reallocating resources to growth-driving activities [1][2]. Group 1: Workforce Reduction - The decision to close the Austin Tech Center and reduce the workforce is a result of the company's technology replatforming [1]. - The company expects to incur one-time costs between $33 million to$38 million related to severance and transition expenses, primarily over the next 12 months [4]. Group 2: Analyst Insights - Analyst Christopher Horvers reaffirmed an Overweight rating for Wayfair, raising the price target from $63 to$50 [1]. - The current workforce reduction is characterized as "very different" from previous reductions, which were aimed at narrowing growth bets or resulted from unprofitable business closures [3]. Group 3: Financial Outlook - Wayfair anticipates realizing savings from the reorganization in the second half of 2025 and early 2026, in addition to planned reinvestments in the business [4]. - At the time of publication, Wayfair's shares had declined by 3.46% to $33.80 [5].