Wayfair Lays Off 10% of Workforce to Stop the Hemorrhaging
People bought a lot of furniture and other home goods online during the first year of the pandemic. Stuck at home and flush with stimulus cash, consumers went on a spending spree. Wayfair (NYSE: W), which was chronically unprofitable before the pandemic, suddenly (and temporarily) looked like a sustainable business.
In 2019, Wayfair posted a free cash flow loss of nearly $600 million. Growth was impressive, but achieving that growth was costly. Everything changed in 2020. Revenue shot up 55%, and Wayfair printed $1.1 billion in free cash flow. The stock soared as investors apparently bought into to the idea that this was the new normal.
It was not the new normal. Demand started to falter in 2021 and weakened further in 2022. Free cash flow tumbled to just $130 million in the year following Wayfair's record haul, then dove deep into negative territory in 2022. Through the first nine months of last year, free cash flow was a loss of just over $900 million, a swing of more than $1 billion from the prior-year period.
Source Fool.com
