Etsy cuts 11% staff as CEO says company is on ‘unsustainable trajectory’
Shares of Etsy Inc. fell more than 7% in Wednesday trading, the biggest decliner on the S&P 500 index, after the e-commerce company announced plans for layoffs.
The company planned to cut about 11% of its workforce, or about 225 people, as it embarked on a wide-ranging restructuring. Etsy Etsy,
Once the transition is complete, the number of employees within the core marketplace team is expected to reach approximately 1,770, which will be close to early 2022 levels.
“The Etsy market is still more than double the size of 2019, but we must acknowledge and adjust to today’s realities,” CEO Josh Silverman said in a memo to employees filed with the Securities and Exchange Commission. “We are operating in a very challenging macro and competitive environment and (gross merchandise sales) are essentially flat beyond 2021. This means you’re not giving the seller more sales, which is the most important thing you can do for them. ”
Silverman said Etsy is currently on an “unsustainable trajectory,” given that employee costs have still increased despite the business conditions and that restructuring measures will help change the company’s course. He expects the changes will make the company more “agile” as Etsy focuses on its “core growth priorities.”
Etsy is shaking up its leadership with a restructuring as Chief Marketing Officer (CMO) Ryan Scott leaves the company. Raina Moskowitz, the company’s COO, will also assume the role of CMO.
“Raina will work to drive growth globally by expanding brand consideration and deepening customer trust and loyalty,” Silverman said in the memo.
Etsy expects $25 million to $30 million in costs related to the restructuring.
So far in 2023, the stock has fallen by a third, while the S&P 500 SPX is up 21%.
