
Wayfair growth stops; Layoffs start - ascales
https://www.bostonglobe.com/2020/02/13/business/layoffs-underway-wayfair/
======
aazaa
> It’s a moment of reckoning for Wayfair, which has been on such a hiring
> blitz over the past several years that its employees often wait in line for
> the escalators up to its offices in the Copley Place mall. The company,
> which expanded into a second office building last summer, now employs 17,000
> people worldwide selling furniture and home decor.

> Yet Wayfair has still failed to turn a profit. Its executives have long
> argued that despite a long track record of losses, the company has been in
> growth mode, investing heavily in its supply chain infrastructure and
> European expansion efforts. More often than not, its board members and
> leadership team will point to Amazon as their model, which for years
> funneled its revenues back into growth and failed to turn a profit.

That model worked for Amazon because there was no Amazon to compete with. Why
anyone would want to invest in a profitless Amazon competitor is beyond me.
The effort seems like a cargo cult.

~~~
basch
It would help if Wayfair was a little more technically solid. The website and
webapp are somewhat glitchy. Browsing their selection gives you a much more
curated feel than Amazons endless selection of random Chinese factory output,
but everytime something refreshes wrong, it just makes you want to go back to
something more solid.

I know these types of apps are hard, but Wayfair, Target, and Costco all have
ways to go on their mobile apps. Amazon and Walmart are lightyears ahead.
Target is catching up but man are some parts of it cumbersome.

That all said, Wayfair does have a good value add proposition; curated sets of
design, and tools for home decoration businesses to us to manage their clients
requests. That sort of "tool for the middle man to utilize" and project
management feature set sets it apart from simple shopping experiences.

~~~
ttul
I hope they don’t crater. Amazon needs some competition. Way fair may not be
perfect, but they offer the magical experience of receiving giant furniture
pieces within days, which you can painlessly return if you’re not happy. That
should exist in the market, yet I fear it won’t if they go away and Amazon
fills the space.

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jonheller
I went to a tech conference at Wayfair HQ. I had never been to an office where
there was a several minute wait just to go up the escalators. So many people.

The conference itself was pretty great, but I remember walking around the
floor, looking at hundreds and hundreds of engineers packed into the office,
and couldn't help but wondering if they really needed all of those people.

------
keenmaster
Amazon is indeed an existential threat to Wayfair. However, while Amazon is an
incredible company, it might become a victim of the future as much as it is
the winner of the present. Self-driving trucks, advanced robotics, and
automated, turnkey warehouses will trivialize supply chain superiority. In
that version of the world, shared warehouses (enabled by automation) will be
even more cost-effective than Amazon's proprietary warehouses. Logistics will
be disintermediated, and the value of Amazon.com will be reduced to that of
its front-end interface and first-party products.

We don't just visit Amazon because it's a one-stop shop. Humans aren't _that_
lazy. We visit it for the whole package:

\- fast shipping

\- reliable pricing

\- Prime lock-in (I paid $100 for this, I better use it)

\- habit

\- and variety.

Habit and variety are redundant. We have the habit of visiting Amazon because
of the first three factors that I mentioned. The variety is present because
the first three factors attract/retain customers, who in turn have the habit
of shopping on Amazon, who in turn attract third party vendors. Amazon can get
away with a lot (rising prices, first-party substitution, sub-optimal
interface) because of logistical barriers to entry and the current necessity
for a vertically integrated intermediary. When those factors disappear, Prime
will be commoditized. Warehouses and delivery networks will be commoditized.
Amazon's moat in third-party online shopping will diminish.

Amazon must continue to grow away from its core platform business. Whole Foods
was a smart acquisition, Amazon Go is the future of low/mid-end retail, and
AWS is a profitable act of genius (high margin, uncorrelated with the rest of
the business). That will not change the fact that specialty websites will
become more serious competitors in the future. In 10-15 years, there will be
plenty of room for focused retail sites like Wayfair.com. The question is: can
they survive until then? Probably, but it will be a rough ride.

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ilamont
How many of these employees that were laid off took part in the protests
against the company last summer?

[https://www.wbur.org/bostonomix/2019/06/26/wayfair-
walkout-i...](https://www.wbur.org/bostonomix/2019/06/26/wayfair-walkout-
immigration-border-detention-center-demonstration)

------
ghc
Wayfair is not and has never been your typical tech startup. The founders
didn't even take VC or give out much equity until soon before their IPO. Given
their conservative behavior, I'm not surprised they looked at the diminishing
returns of hiring more engineers to work on AR/VR/whatever flavor of the
moment and decided to cut costs. Because at Wayfair, engineering is just
another cost center.

Having 350 more engineers on the market is only a good thing. Salaries in
Boston have gotten to the point where an engineer with no experience just out
of a middling CS education can demand $120-150k and often get it. Where does
that leave most (non-startup) companies here? With inexperienced and
understaffed teams.

~~~
otras
> Having 350 more engineers on the market is only a good thing. Salaries in
> Boston have gotten to the point where an engineer with no experience just
> out of a middling CS education can demand $120-150k and often get it. Where
> does that leave most (non-startup) companies here? With inexperienced and
> understaffed teams.

Isn’t that implying that most non-startup companies just aren’t willing to pay
market rate for the devs that they want?

~~~
ghc
No it implies that rapidly hiring FAANG divisions are so desperate for talent
they're willing to outbid anyone else. One could call that a market, but it's
a market distorted by a few tech companies that are far wealthier than the
rest.

~~~
unlinked_dll
Yes there's a labor shortage. No it's not just FAANG paying those rates.
Startups are also paying on par or just slightly below those rates.

------
newfeatureok
It's not just Wayfair - if and _when_ there is a recession there's going to be
a complete annihilation of most of these overvalued, unprofitable companies.
Most of this behavior is only possible because of dirt cheap money.

------
Scoundreller
I keep getting paywalls, but this amp link works for me:

[https://www.google.com/amp/s/www.bostonglobe.com/2020/02/13/...](https://www.google.com/amp/s/www.bostonglobe.com/2020/02/13/business/layoffs-
underway-wayfair/%3FoutputType%3Damp)

~~~
ganeshkrishnan
"AMP" is the new incognito mode to bypass paywalls

