Etsy to Lay Off 225 Workers as Merchandise Sales Remain Flat

Etsy's Flat Merchandise Sales

Etsy, the popular online marketplace, is making the difficult decision to lay off 225 of its workers. This comes after two years of "essentially flat" merchandise sales, according to CEO Josh Silverman. In an email to employees, Silverman stated that the company's gross merchandising sales have remained stagnant since 2021.

Challenging Times for Etsy

Etsy's decision to downsize comes at a challenging time for the company. It is facing tough competition from rivals like Shein and Temu, while also operating in a challenging macro and competitive environment. Despite introducing cost-cutting measures and adjusting hiring plans, Etsy's sales have not seen the desired growth.

Layoff Details

The layoffs will affect approximately 225 team members, which accounts for 11% of the company's workforce. Silverman emphasized the need for change in order to ensure a sustainable future for Etsy. In addition, the company announced the departure of its chief marketing officer, Ryan Scott, whose responsibilities will be absorbed by COO Raina Moskowitz.

Support for Affected Employees

Despite the unfortunate timing of the announcements during the winter holidays, Etsy is committed to supporting its affected employees. All impacted admin staff will remain on the Etsy payroll until at least January 2, 2024, even though their last working day would have been on Wednesday. The company is also offering an enhanced severance package, including severance equivalent to 16 weeks of base pay, with an additional week for each full year of service. Additionally, staff will still receive bonus payments for the year.

Industry Trends

It is worth noting that Etsy is not the only company facing the need to downsize in order to manage costs. Recently, streaming giant Spotify laid off 17% of its staff due to a difficult economic environment. Spotify CEO Daniel Ek highlighted the need to become "relentlessly resourceful" in order to adapt to the changing landscape.

Etsy's decision to lay off workers is a strategic move aimed at addressing the challenges the company is currently facing. By making these changes, Etsy hopes to position itself for future growth and success in the highly competitive online marketplace industry.

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By: ktan@businessinsider.com (Kwan Wei Kevin Tan)
Title: Etsy to Lay Off 225 Workers as Merchandise Sales Remain Flat
Sourced From: www.businessinsider.com/etsy-layoffs-essentially-flat-merchandise-sales-2023-12
Published Date: Thu, 14 Dec 2023 04:08:23 +0000