Etsy, the well-known e-commerce platform specialising in unique and handmade goods, has announced an 11% reduction in its workforce, affecting approximately 225 employees. The move comes as the company faces what its CEO, Josh Silverman, describes as a "very challenging" macro and competitive environment in the current market landscape.
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Despite Etsy's marketplace doubling in size since 2019, recent events have prompted the need for significant changes within the organisation. The company's gross merchandise sales have remained relatively stagnant since 2021, a concerning factor given its emphasis on supporting sellers to boost sales.
In light of these challenges, Etsy revised its fourth-quarter guidance, anticipating a decline in gross merchandise sales by 1-2% compared to the same period last year.
This news saw Etsy's shares close 2% lower after an initial drop of 7% following the announcement, indicating investor concern about the company's outlook amidst these strategic changes.
Considering the timing of these layoffs amid the holiday season, Etsy plans to continue paying affected employees until at least Jan. 2, providing severance packages and extended health insurance benefits.
The company anticipates completing the restructuring by the end of the first quarter of 2024, aiming to achieve enhanced operational efficiency and adaptability in the evolving market landscape.
Source: www.cnbc.com