Home Depot, the top retail chain Americans rely on for home improvement products, has been struggling to overcome a major shift in consumer behavior over the past few years, which has had a ripple effect on its business, prompting the company to shift gears.
As the housing market continues to face uncertainty due to affordability concerns, many consumers have been curbing spending on home improvement projects.
Amid this trend, Home Depot’s U.S. comparable sales only increased by a minor 0.1% year over year during the third quarter of 2025, according to the company’s latest earnings report. Also, data from Placer.ai showed that foot traffic at Home Depot’s same-store locations decreased by 0.4% during the quarter compared to the same time period in 2024.
During an earnings call in November, Home Depot CEO Ted Decker said that the company continues “to see softer engagement in larger discretionary projects where customers typically use financing to fund renovation projects.”
“What’s impacting us and home improvement is the ongoing pressure in housing, in incremental consumer uncertainty,” said Decker. “So take housing. I mean, housing has been soft for some time. We all know the higher interest rates and affordability concerns. But what we’re seeing now is even less turnover; the housing activity is truly at 40-year lows as a percentage of housing stock.”
Despite the average 30-year mortgage rate in the U.S. sitting above 6%, the housing market is slowly recovering as rates continued to decrease in December, which is a glimmer of hope for Home Depot and other competitors.
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The average 30-year fixed-rate mortgage in December was 6.19%, down from 6.24% in November.
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The median existing-home sales price reached $405,400, reflecting a 0.4% year-over-year increase.
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Existing-home sales rose by 5.1% month over month, but are only up 1.4% year over year.
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Month-over-month U.S. home sales spiked in all regions; however, year-over-year sales increased in the South, remained flat in the Midwest and West, and decreased in the Northeast.
Sources: National Association of Realtors, Freddie Mac
“December home sales, after adjusting for seasonal factors, were the strongest in nearly three years,” said NAR chief economist Lawrence Yun in a press release. “Inventory levels remain tight. With fewer sellers feeling eager to move, homeowners are taking their time deciding when to list or delist their homes. Similar to past years, more inventory is expected to come to market beginning in February.”
Amid the housing market’s slow recovery, Home Depot has decided to shrink its workforce as it battles weak consumer demand.
The company laid off almost 800 employees in its store support center in Atlanta, Georgia, according to a WARN notice filed on Jan. 28.
In addition, Home Depot also warned the rest of its corporate workforce that they will be expected to return to working in offices five days a week, starting April 6. Employees are currently allowed to work in person Monday through Thursday, four days a week, according to a recent report from Business Insider.
“We’re simplifying our corporate operations to better support our stores and our customers,” said a Home Depot spokesperson in a statement. “Our goal is to drive greater agility and position the company to move faster and stay even more closely connected with our frontline associates.”
The move from Home Depot comes after it recently scaled back its supply chain, leading to job cuts at its distribution facilities.
Related: Home Depot and Lowe’s quietly gain new rival
Its subsidiary HD Supply shut down its distribution facility in La Vergne, Tennessee, earlier this month, resulting in 108 layoffs.
In October, Home Depot also closed a distribution facility in Mexico, Missouri, resulting in 61 employees losing their jobs.
Home Depot’s latest round of layoffs comes during a time when it is increasingly investing in artificial intelligence to make its operations more seamless.
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Earlier this month, the company introduced AI-powered coaching tools from Rilla to support and train its service and sales employees on communication and service delivery.
Home Depot also recently expanded its partnership with Google Cloud to launch AI tools to assist shoppers and associates on project completion tasks.
Home Depot isn’t the only company to announce layoffs this year. Amazon announced 16,000 layoffs earlier this week to “strengthen” its organization. Two weeks ago, Meta also laid off over 1,000 employees in its Reality Labs division amid low profits from its Metaverse business.
Additionally, T-Mobile conducted several job cuts in recent weeks as its new CEO enforces a “digital transformation” at the company.
Layoffs aren’t going away anytime soon. A recent survey from Resume.org found that 6 in 10 companies plan to cut jobs this year.
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Approximately 55% of companies expect to conduct layoffs in 2026.
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Specifically, 48% said their layoffs will definitely or probably occur during the first quarter of this year.
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Also, 44% of companies said artificial intelligence was the top reason for layoffs, while 42% said reorganization/restructuring and 39% said budget constraints.
Source: Resume.org
“Most organizations are reducing roles that are higher-cost, slower to yield ROI, or misaligned with new operating models,” said Kara Dennison, head of career advising at Resume.org, in a statement. “That often includes layers of middle management, duplicated functions after reorganizations, and roles tied to legacy processes. At the same time, they’re investing in roles that support growth, automation, data, customer retention, and execution speed.”
Home Depot’s decision to ask employees to return to the office four days a week, in conjunction with its layoff announcement, also follows in the footsteps of many other companies in corporate America that recently scaled back remote work, such as JPMorgan Chase, Amazon and Intel.
A survey from Resume Builder last year found that 1 in 8 companies plan to increase the number of days they require employees to be in the office in 2026, while 3 in 10 will completely remove remote work.
Amid this in-office push, national office visits increased 5.6% year over year in 2025, bringing attendance to 31.7% below pre-COVID-19 pandemic levels, the highest point since the pandemic, according to a white paper from Placer.ai, which was shared with TheStreet.
Related: Meta makes drastic workforce decision after $73 billion in losses
This story was originally published by TheStreet on Jan 31, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.
