In a major announcement from one of the biggest e-commerce marketplaces right now, it has been revealed that Etsy is laying off about 11% of its workforce from the company which equates to around 225 employees being laid off. In a CNBC report, it is mentioned that “Approximately 225 employees will be cut from Etsy’s workforce, which will bring the headcount for the core Etsy marketplace to about 1,770 people, similar to the company’s headcount in early 2022 and above 2020 levels. Etsy CEO Josh Silverman noted in a letter to employees that Etsy’s marketplace — known for selling handmade items and connecting buyers with local artisans across the globe — has more than doubled in size since 2019 but said today’s realities call for sweeping changes”.
Etsy CEO’s letter to its employees read, “We are operating in a very challenging macro and competitive environment, and [gross merchandise sales] has remained essentially flat since 2021,”. “This means we are not bringing our sellers more sales, which is the single most important thing we can do for them. At the same time, employee expenses have grown, even as we have introduced significant cost-cutting measures and adjusted or paused hiring plans. This is ultimately not a sustainable trajectory and we must change it.”
In another statement, Silverman said “Etsy is intensely focused on reigniting growth, driving sales for our nearly 7 million sellers around the world, and delivering value to all of our stakeholders. Today, we announced that we are reorganizing our internal structure so that we can double down on these efforts, which unfortunately means saying goodbye to approximately 225 of our colleagues,”
It is also reported that “Etsy’s layoffs will cost between $25 million and $30 million, the bulk of which will be used for severance payments, employee benefits and other related costs, the company said in a securities filing. Over time, the restructuring is expected to “deliver meaningful operational efficiencies and cost savings and/or cost avoidance,” especially when it comes to salary costs and benefits. The restructuring is expected to be complete by the end of the first quarter of 2024″. It is also worth noting that Etsy’s chief marketing officer Ryan Scott will be leaving the company due to these restructuring.