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Etsy to cut 225 jobs after reporting weak sales

By Nithya Bose in US business news, posted December 14, 2023

E-commerce platform Etsy is cutting around 225 employees, or approximately 11 percent of its staff, during the peak holiday season.

The company attributes the cuts to restructuring and cost-cutting in response to a persistently challenging macro and competitive landscape.

CEO Josh Silverman pointed out the remarkable growth of Etsy's marketplace since 2019 but said the firm is undergoing major changes given the current realities.

Despite doubling in size, gross merchandise sales have remained flat since 2021.

The layoffs will bring the core Etsy marketplace's headcount to about 1,770 people, aligning it with early 2022 levels and surpassing 2020 figures.

The announcement coincides with updated fourth-quarter guidance.

Gross merchandise sales have remained flat since 2021

Etsy expects a one to two percent decline in gross merchandise sales compared to the year-ago quarter, with revenue expected to increase by two to three percent.

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The restructuring will incur costs between $25 million and $30 million, primarily allocated to severance payments, employee benefits, and related expenses.

The company expects the reorganisation to yield operational efficiencies and significant cost savings, particularly in salary costs and benefits.

Etsy will complete the restructuring by the end of the first quarter 2024.

Additionally, Chief Marketing Officer Ryan Scott will depart, and the role will be consolidated under Chief Operating Officer Raina Moskowitz.

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Chief Human Resources Officer Kimaria Seymour will exit, with Toni Thompson assuming the role.

Etsy assures affected staff, who will be paid through at least January 2, of a severance package including 16 weeks of base pay.

Those impacted will receive additional compensation based on years of service, extended COBRA health insurance benefits, and the option to retain company laptops.

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