Amid consumer cutbacks, Chewy laying off more than 200 workers
Less than three months after reporting on cutbacks by inflation-weary pet owners, online pet retailer Chewy.com is laying off more than 200 workers.
The layoffs include workers at the company’s Plantation headquarters as well as other sites, according to the website TechCrunch.com.
They followed comments by the company’s CEO Sumit Singh that Chewy’s customers are reacting to higher prices by cutting back on pet treats and shifting from wet to dry food.
“This behavior is driven by a more fluid macro environment, including high levels of inflation, which have been passed through the industry over the past 18 months,” Singh said during a second-quarter earnings call with investors on Aug. 31. “Our dialog with our suppliers confirms that these trends are permeating throughout the pet industry.”
Singh said the trend was not yet “concerning,” nor cause for raising “alarm bells” because Chewy offers “value and convenience.”
“Therefore we believe we’re somewhat insulated from the full impact of these current times, given the strength in (Chewy’s) business model,” he said.
TechCrunch reported that the layoffs included workers in human relations, recruiting, data and business intelligence and included directors and higher managers, including a vice president.
Chewy, which did not provide details of which jobs were eliminated, plans to report its third-quarter earnings on Dec. 6.
Its second quarter earnings, covering the period between April 1 and June 30, included a $1.2 million increase in adjusted net income, to $63.3 million, while adjusted basic and diluted earnings per share were flat at $0.15 compared to the previous year.
Analysts voiced concerns about a decrease in traffic to Chewy’s e-commerce site — from 20.49 million during the second quarter of 2022 to 20.39 million during the same period in 2023.
Chewy confirmed the layoffs in a statement to TechCrunch:
“As we head into 2024, we took the opportunity to consolidate some of our headcount and align our efforts into priorities which we believe will gain us the most significant customer wins and generate the highest business returns, to enable us to strengthen the company’s future,” said Chewy spokesperson, Diane Pelkey.
“This was a difficult decision that was carefully considered as part of our overall strategy and ongoing focus on becoming an ever more agile and disciplined company. We are grateful to our team members for their contributions and remain committed to supporting them during this transition,” she added.
Founded in Dania Beach by two college roommates in 2011, Chewy was acquired by retail pets supply giant PetSmart for $3.35 billion in 2017, before it was taken public in 2019. PetSmart’s largest investor, BC Partners, split the companies in 2020.
With offices in 14 states, the company employs more than 20,000 workers, according to its website.
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at rhurtibise@sunsentinel.com.