E-commerce company Etsy is laying off 11 per cent of its workforce in order to restructure its business and streamline costs.
Approximately 225 employees will lose jobs at Etsy in the holiday season, bringing its core marketplace headcount down to nearly 1,770 people, reports CNBC.
“We are operating in a very challenging macro and competitive environment, and (gross merchandise sales) has remained essentially flat since 2021,” Etsy CEO Josh Silverman told employees in an email.
“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,” he added.
Etsy stock closed 2 per cent down following the announcement, after falling as much as 7 per cent earlier in the day.
The layoffs will cost Etsy between $25-$30 million, including severance payments, employee benefits and other related costs.
The restructuring is expected to “deliver meaningful operational efficiencies and cost savings and/or cost avoidance”.
The company will give severance of 16 weeks of base pay and one week for each full year of service, along with other benefits to the impacted employees.
The restructuring is expected to be complete by the end of the first quarter of 2024.
Etsy’s chief marketing officer Ryan Scott will leave the company. The chief human resources officer Kimaria Seymour will also move on as part of the restructuring exercise, according to the report.
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