Etsy, the popular online marketplace for handmade and vintage items, has announced that it will be laying off 225 employees, representing approximately 11% of its workforce. The decision, according to CEO Josh Silverman, is in response to the need for a leaner and more agile workforce to support future growth.
The move comes as a result of two years of stagnant gross merchandise sales and increasing employee expenses. In an effort to streamline operations and reposition the company for success, Etsy has chosen to reduce its workforce. The timing of these layoffs, particularly during the holiday season, has been acknowledged as unfortunate. However, affected employees will remain on the company’s payroll until at least January 2nd.
The news of Etsy’s layoffs follows a similar announcement by Hasbro, a renowned toymaker, which recently revealed plans to lay off 1,100 employees. Hasbro’s decision was attributed to lackluster sales, a concern echoed by Etsy.
In response to the announcement, shares in Etsy dropped 2.2%, reflecting investor concerns about the company’s current challenges. Additionally, several key executives, including the chief marketing officer, will be departing as part of the restructuring process.
Etsy anticipates that severance payments and related expenses will cost the company between $25 million and $30 million. However, despite these financial setbacks, CEO Josh Silverman expressed confidence in the company’s ability to overcome these challenges and forge a path towards future success. Silverman urged the remaining staff to remain resilient and committed to the company’s long-term objectives.
As Etsy restructures its operations and adjusts its workforce, it remains to be seen how these changes will ultimately impact the company’s performance. Nevertheless, the management’s determination and optimism provide hope for a brighter future.