US-based home improvement retailer Wayfair is laying off around 340 members of its technology team as the company shifts towards AI to boost productivity.

The news comes as the company plans to reshape its technology arm after completing a major modernisation and redevelopment project, in a move that will see the closure of its Technology Development Centre (TDC) in Austin, Texas.

Over the past five years, the retailer has undergone a series of digital transformations, including a cloud migration.

In a statement on Friday, the firm said: “The journey required significant investment, dedication, and the collective effort of our talented technology teams.”

It added: “We now operate on a modern, scalable, and high-performance infrastructure designed to adapt to the evolving needs of our customers and business.”

With the restructure, the arm will continue to operate from its Technology Development Centers (TDCs) located in Seattle, Mountain View, Toronto, Boston, and Bengaluru.

The firm said it’s now harnessing technology to boost customer growth with tools such as advanced personalisation and AI to boost productivity across the organisation.

Wayfair's technology team is a key part of its operations, responsible for building and maintaining the technology that powers the company's e-commerce platform.

The team consists of over 2,500 technologists working on various innovative solutions to improve the shopping experience and drive business growth.

The team covers data science, machine learning, mobile app engineering, consumer-facing and back-end systems, cloud infrastructure and security.

“To all of our Wayfair team members—thank you for your dedication, resilience, and contributions to our journey. Your commitment fuels our innovation and strengthens our ability to shape the future of retail,” the company said.

As a result of the reorganisation, the company expects to incur aggregate charges of approximately $33 million to $38 million, consisting primarily of cash employee-related costs, including severance, benefits and transition cost.

Most of the cash payments are expected to be completed over the next 12 months.

“In the near term, the company expected elevated transition costs will largely offset structural costs saving from the Technology reorganisation,” Wayfair said, adding that the company expects to incrementally realise savings from the reorganiszation starting in the second half of 2025 and building into the beginning of 2026.

The firm added the plan includes continuing to pursue investments in cutting-edge solutions to improve its platform and boost sales growth.

In January, the firm announced it was to cut 1,750 jobs or around 10 per cent of its global workforce, with the measure being part of $1.4 billion cost cutting measures to reduce operating cost amid weakened demand.

Around 1,200 of the job cuts are across corporate positions and account for about 18 per cent of corporate employees.

Wayfair said that the cuts demonstrate its plans to minimise management layers and become more agile.

The company, which axed 870 roles in August 2022, said that the latest cuts will save the firm around $750 million annually.

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