Morgan Stanley says Wayfair staff reduction creates additional savings potential

Morgan Stanley notes Wayfair’s (W) announcement of a workforce reduction involving approximately 340 members of its Technology team and after speaking with management says the firm’s interpretation “reading between the lines” is that this reduction in force was always a potential component of the company’s productivity and efficiency drive, though it may have been expedited because the current sales backdrop remains soft with tariff uncertainty looming. The firm, which estimate savings, prior to any reinvestment, could amount to $30M-$60M, adds that the key for the stock remains achieving a top line inflection and profit flow through. The firm has an Overweight rating and $72 price target on Wayfair shares.