To reduce costs, Etsy will make a workforce adjustment that will affect about 11% of its workforce, leaving about 225 employees, the company reported in a statement. This is what Etsy is assuming following the announced cuts The workforce will be reduced to around 1,770 peoplea similar number to the beginning of 2022.
«Even though the Etsy marketplace is still more than double the size of 2019, we must recognize and adapt to current realities“, has explained Josh Silverman, Etsy CEOwhich underlines that the company is currently operating in a macro and competitive environment «very challenging«.
«At the same time, personnel expenses increased despite us implementing significant cost-cutting measures and adjusting or suspending hiring plans. Ultimately, this is not a sustainable path and we must change it“, defended the CEO.
The company’s goal is “Reignite growth, increase sales for millions of sellers around the world, and deliver value to stakeholders«. As a result of the restructuring Chief Marketing Officer Ryan Scott’s responsibilities will be assumed by Chief Operating Officer Raina Moskowitz. Additionally, Kimaria Seymour, director of human resources, will leave the position and Toni Thompson, current vice president of global people and talent strategy, will assume the role. These changes will come into effect on January 1, 2024.
Etsy appreciates this The restructuring plan will entail extraordinary costs of between $25 and $30 million (around 23 and 28 million euros), which essentially consists of cash expenses for the payment of severance payments. Affected employees will receive their salaries at least until January 2nd. The severance packages include: 16 weeks of base pay plus one additional week for each year of service.
Financial expectations
Looking ahead to the final quarter of the year, the company forecasts a 1% to 2% decline in gross sales compared to the same period in 2022. Expects sales increase of between 2% and 3%. Aside from that, Etsy now expects adjusted EBITDA of 27% to 28%.
Etsy remains true to its mission of supporting sellers and creating value for everyone involved. The statement says: Silverman has expressed its commitment to increasing sales for the platform’s millions of sellers around the world: “While layoffs are unfortunate, they are a necessary step to refocus the company’s efforts and ensure long-term success. The aim of the restructuring is to generate significant benefits and position Etsy for a more sustainable future«.