The start of 2024 has seen a surge of layoffs in a number of industries as businesses struggle to adapt to shifting customer behavior and economic instability. The retail sector is among the most impacted, as the pandemic and the development of internet shopping have resulted in a drop in sales and foot traffic. One of the more unexpected job cutbacks among the retail behemoths scheduled for 2024 is Zulily, a well-known online retailer with a focus on flash sales of toys, apparel, and household products.

One of the US e-commerce sites with the quickest rate of growth, Zulily was acquired by Qurate Retail Group in 2015. As of 2023, the platform had over 6.1 million active users and $1.7 billion in revenue. However, because it competes with other online shops like Amazon, Walmart, and Target, the company has also had difficulty retaining its profitability and consumer loyalty.

Zulily declared in January 2024 that it would fire 274 workers at its Obetz, Ohio fulfillment operation, or roughly 15% of its total employment. Many employees and municipal politicians were taken aback by this decision, since they had anticipated Zulily to go on expanding throughout the state.

Reasons for the layoffs

Zulily claims that the layoffs are a component of a reorganization plan meant to enhance both its customer experience and operational effectiveness. The business said that it would combine its fulfillment centers in Pennsylvania and Nevada and contract out a portion of its work to outside logistics companies. Additionally, Zulily declared that it will keep its corporate headquarters in Columbus, Ohio, which employs roughly 500 people, and that it would provide severance packages and transition support to the impacted employees.

Nonetheless, several industry experts and observers have conjectured that Zulily’s choice to reduce employment in Ohio might have been motivated by other factors. One of them is the growing competition from other online retailers, particularly Amazon, which has been making significant investments in its fulfillment network and providing customers with more affordable and expedited delivery alternatives.

With free shipping, streaming, and other perks offered to Prime members, Amazon, which employs over 23,000 people in Ohio and has over 40 fulfillment centers there, has been able to draw in more buyers and merchants. However, Zulily has come under fire for both its expensive shipping costs, which may range from $5.99 to $19.95 each order, and its unreliable and sluggish shipment timeframes, which can take up to two weeks or longer.

The pandemic and social distancing policies have affected consumer behavior and preferences, which could be another factor contributing to Zulily’s layoffs. The foundation of Zulily’s business strategy is instilling a sense of urgency and excitement in its consumers, who must act quickly to take advantage of the limited-time offers made on the company’s website and app.

But as a result of the pandemic, a lot of people have changed from making impulsive purchases to making necessary purchases and have grown more cost- and quality-conscious. These clients, who are searching for better value and dependability in their purchases, might not be drawn to Zulily’s products, which are primarily obtained from overstocked or liquidated inventories.

Furthermore, since individuals are spending more time at home and less time socializing and traveling during the epidemic, Zulily’s product categories—clothing, accessories, and home décor—might not be in high demand.

Impact of the layoffs

The Obetz, Ohio, fulfillment center of Zulily has experienced layoffs that have had a major effect on the local business and community. Since its opening in 2015, the fulfillment center has employed many people in Obetz and the surrounding villages, making it one of the region’s biggest employers. Additionally, the center helped the region’s infrastructure improve and brought in tax income.

Obetz’s mayor, Angela Kirk, expressed her displeasure and annoyance with Zulily’s decision, claiming that she was unaware of the layoffs until the day they were made public. In addition, she pledged to collaborate with county and state representatives to assist the displaced workers in locating new jobs and to draw in new companies to the region.

Concerns concerning the future of Ohio’s retail sector, which has been severely impacted by the epidemic and internet competition, have also been raised by the layoffs at Zulily. The Ohio Department of Job and Family Services reports that the retail trade industry lost 28,900 jobs in 2023 and that, in December of that same year, the unemployment rate was 7.4%, which was higher than the 5.5% state average.

There are more retailers in Ohio besides Zulily that have declared layoffs for 2024. VF Corp., which will close its Lee Jeans distribution center in Mocksville and eliminate 500 jobs, HannesBrands, which will close its distribution center in Rural Hall and eliminate 1,592 jobs, and Amazon, which will eliminate 90 jobs at its delivery station in Euclid, are among the other companies that have filed WARN notices informing of impending layoffs in Ohio for 2024.

Conclusion

Popular online retailer Zulily has announced that it would lay off 274 people at its fulfillment center in Obetz, Ohio, in 2024. Zulily provides flash deals of a variety of products. According to the corporation, the reorganization plan includes the layoffs and aims to enhance customer satisfaction and operational efficiency.

However, some analysts and industry experts have speculated that Zulily’s decision might have been influenced by additional factors, such as the growing competition from other online retailers, particularly Amazon, and the shifting preferences and behavior of consumers as a result of the pandemic and social distancing measures.

In addition to having a detrimental effect on the local economy and community, the layoffs have sparked worries about the future of Ohio’s retail sector, which has been struggling due to the pandemic and online competition. Not only has Zulily confirmed job cuts in Ohio for 2024, but many other retailers have also filed WARN letters announcing impending layoffs in the state, including VF Corp., HannesBrands, and Amazon.