Wayfair Inc. announced additional details related to right-sizing its cost structure as well as continued strong business performance since the Cyber Five period. Totaling more than $1.4 billion in annualized cost actions, the plan initiated in August 2022 is well underway and is expected to accelerate the company's timeline for adjusted EBITDA breakeven to earlier in 2023 as the first step towards positive free cash flow. As a part of this effort, Wayfair announced a reduction of approximately 1,750 employees, representing 10% of its global workforce as of December 31, 2022.
This includes approximately 1,200 or 18% of corporate employees. These changes reflect efforts to eliminate management layers and reorganize to be more agile. Inclusive of the August 2022 restructuring, the labor portion of the plan represents approximately $750 million in annualized cost savings, with the major steps necessary to realize these savings now complete.
As a result of the workforce reduction, Wayfair expects to incur between approximately $68 million and $78 million of costs, consisting primarily of employee severance and benefit costs, most of which are expected to be incurred in the first quarter of 2023.