Wayfair CEO Niraj Shah is facing criticism after sending an end-of-year memo to employees urging them to “work longer hours” and saying “we cannot reward laziness.” The memo comes after a turbulent year for the online furniture company that included two rounds of layoffs.
CEO Calls For Employees To “Blend Work And Life” And Not “Shy Away From Working Long Hours”
In the internal memo sent this week, Shah told Wayfair employees that “winning requires hard work” and said they need to “blur the lines between work and personal time.” He said they should be spending time with co-workers outside of work and “socialize over dinner or drinks” to build bonds.
Shah also called out “laziness” among some employees, saying “we cannot reward it” and that “we must demand excellence and hold people accountable when they do not deliver it.”
The CEO, who co-founded Wayfair in 2002, urged employees not to “shy away from working long hours”:
“Focus on your work when you are working. When you take breaks, truly renew. But don’t shy away from working long hours when needed. Blend work and personal life.”
He signed off the memo saying he is “asking you to join me on this journey” and that if employees put in the work, “I know we will succeed brilliantly.”
Backlash Over Work-Life Balance Comments and Layoffs This Year
Shah’s call for longer hours sparked immediate criticism online from some Wayfair employees as well as labor activists. His comments come after Wayfair laid off 870 corporate employees in August – about 5% of its global workforce – due to macroeconomic conditions and slowing demand.
Critics said the CEO was unfairly putting pressure on overworked employees after the company had already cut jobs this year. Wayfair also laid off 750 customer service employees in June. One Twitter user said:
“Wayfair lays off 1500 employees before the holidays and this a****** has the audacity to send out a memo like this?! Seems like this CEO doesn’t GAF about his employees’ well-being at all.”
The memo also fueled debates around work-life balance and employee burnout. One Wayfair employee told Fortune magazine “I didn’t know whether to laugh or cry” when reading it, adding “I have lots of friends working lots and lots of hours there already.”
|Number of Layoffs
|750 customer service employees
|870 corporate employees
Labor organizer Mary Kay Henry, president of Service Employees International Union, tweeted that Shah should apologize:
“Exploiting workers is unacceptable @wayfair. Niraj Shah should apologize for demanding employees work longer hours after laying off 1,500 this year.”
Some people defended the CEO, arguing he was just encouraging staff to work hard. But one analyst told the Boston Globe the memo was “tone deaf” amid current economic uncertainty.
What Led To This Controversy
Boston-based Wayfair has seen turbulent times lately, struggling with supply chain issues, inflationary pressures, and waning consumer demand as households cut back on discretionary spending.
The company saw booming success during the early days of the pandemic as homebound customers splurged on furniture upgrades. Revenues surged 55% to $14.8 billion in 2021. But its stock plunged 74% over the past year as growth slowed.
Wayfair posted a net loss of $778 million in Q3 and said it’s on track for negative free cash flow of about $1.4 billion in 2022. Layoffs this summer were part of Shah’s push to cut $750 million in annual costs.
Last week Wayfair also announced it was closing five brick-and-mortar stores, leaving it with six remaining U.S. retail locations.
Shah likely intended his year-end memo to motivate and rally employees during difficult times. But his calls for longer hours, more bonding with co-workers, and criticism of “laziness” clearly missed the mark for some staff.
What Happens Next? Additional Fallout Expected
The memo itself may have done more harm than good when it comes to boosting morale at Wayfair. While some employees seemed to take Shah’s words in stride, others felt insulted after a year of job losses.
More internal and public backlash seems likely in coming weeks as the controversy continues gaining mainstream media coverage. Some PR experts predict Wayfair’s stock could also take a hit from the negative publicity.
It remains to be seen whether Shah will walk back any of his comments. The CEO is known to value profits and growth above all else. But sustaining that approach may require rebuilding trust with employees.
That could involve shifting tone, acknowledging staff concerns about work-life balance, or rolling out new benefits aimed at worker wellbeing. If Shah fails to respond effectively, retaining talent could become an even bigger challenge next year.
For now the CEO appears intent on powering through a difficult period without changing course – despite mounting criticism of his latest motivational tactics. But if Wayfair struggles persist, pressure will keep building for a new direction focused less on the bottom line and more on the wellbeing of workers powering the company’s success.
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