Online furniture retailer Wayfair Inc. pushed back the opening of its Jacksonville fulfillment center and terminated the jobs of 42 employees, a spokeswoman said.
Corporate Communications Associate Director Susan Frechette said by email Feb. 14 that 47 employees were sent to other Wayfair facilities.
“We were unable to move forward with employment for 42,” she said.
Wayfair is paying employees for the past 3½ weeks when they were unable to work because of the unexpected delay and paying for an additional week, she said.
“We recognize this is difficult news for our employees and are working to assist in the transition as much as possible,” she said.
She said Wayfair is assisting with career placement support.
Frechette said the situation is not related to the Boston-based company’s decision last week to lay off 550 people globally.
Frechette said Wayfair expects to occupy the center in AllianceFlorida at Cecil Commerce Center when it is completed. She did not have a date for that.
“Due to unexpected delays in the building’s readiness for operations, we have had to push back the opening of this facility to a tentative date,” Frechette said.
“Unfortunately, that means we are unable to move forward with approximately half of the roles in Jacksonville at this time and will need to deploy the rest of the team to our other locations,” she said.
In January, Frechette said the online home-furnishings retailer expected to open the center in the next couple of months.
She said then that Wayfair had hired about 45 people and expected to employ 250 by the end of 2021.
Wayfair will lease a 1,012,567-square-foot building under development at 13483 103rd St. The Conlan Co. is the contractor
The city issued temporary certificates of occupancy Dec. 20 so that Wayfair personnel could reach their work areas for setup while interior build-out continued.
Dallas-based Hillwood is developing the distribution center next to the 1 million-square-foot Amazon.com fulfillment center. Hillwood is the city’s master developer at Cecil Commerce Center.
The city announced Dec. 3, 2018, that Wayfair would lease the building and open the $72 million center.
A city incentives agreement says Wayfair will invest $50 million into real estate and $22 million into machinery, equipment, furniture and fixtures.
The city said Wayfair will complete the center by year-end 2020 and create 250 jobs by the end of 2021. Building plans indicate 250 parking spaces and future spaces of 240, totaling 490.
Wayfair refers to the Jacksonville center as a Large Parcel Home Delivery Operation. The company told the city its average salary for full-time jobs will be $33,000 plus benefits.
City Council approved a $3.3 million city Recapture Enhanced Value grant based on the additional property taxes generated by the project.
City Assistant Director of Public Affairs James Croft said Feb. 14 that he checked with the Office of Economic Development about the company’s intentions.
“We have not been notified of any changes to the company’s plans in Jacksonville,” he said by email.
As of Sept. 30, Wayfair predicted substantial completion by Dec. 17.
“We fully expect to open when the building is ready,” Frechette said Feb. 13.
Forbes.com reported that Wayfair announced Feb. 13 it will cut 550 jobs, or 3% of its workforce, as its CEO admitted the company has focused too much on growth at the expense of efficiency.
Manufacturing.net said most of the layoffs are at Wayfair’s Boston headquarters and its European office in Berlin. The company has about 17,000 employees worldwide.
The site said that Wayfair, founded nearly 18 years ago, has never made a profit.
Forbes.com said Wayfair hasn’t turned a profit because of its widening losses, which has caused its stock price over the last year to fall 27%.
“Shipping bulky furniture is expensive, and the company has decided to hire aggressively and expand the business instead of post near-term profit,” Forbes.com reported.
“Through two years of aggressive expansion, we no doubt built some excess, inefficiency and even waste at times, in almost every area.” said CEO Niraj Shah in an email to employees, according to the Boston Globe.
Forbes.com cited a corporate spokesperson to say:
“To position the organization to take advantage of the opportunity ahead, we continually evaluate the needs of the business and work to increase efficiencies while aligning our teams with the initiatives that drive the greatest impact for our customers.”