Etsy: Online marketplace lays off 11% of staff to cut costs

 

Etsy is cutting about 225 jobs, or 11% of its workforce, as part of a plan to bring down its costs.

As part of the move several executives will leave the online marketplace, including its chief marketing officer. 

Chief executive Josh Silverman told staff the cuts were needed as sales had been "essentially flat" for two years.

He acknowledged the "unfortunate" timing of the cuts, during the holiday season, adding that laid-off staff would be paid until at least 2 January.

The job cuts are part of a strategy to make Etsy a "more focused, agile company", Mr Silverman said in post on the firm's website.

The lay-offs will cost the company as much as $30m (£23.7m) for severance payments, employee benefits and related costs, it said in an announcement to investors.

Following the job cuts, which are expected to be completed in the first three months of next year, Etsy's core marketplace team will employ around 1,770 people.

What is Etsy and who owns it?

The online marketplace allows independent sellers to set up their own shop. It specialises in bespoke items, handicrafts or things not usually available in High Street shops.

Etsy Inc. is a US-based company which trades its shares on the Nasdaq stock exchange in New York, where it listed its stock in 2015. Etsy's shares are currently trading at around $84 each - a far cry from a record high of more than $294 during the Covid pandemic in 2021.

Its biggest shareholders are major financial institutions such as Vanguard Group and BlackRock.

The company is led by chief executive Josh Silverman who has worked at an eclectic mix of businesses such as online auction site eBay, the internet chat firm Skype and American Express. He has been chief executive since 2017.

It was originally founded in 2005 by Rob Kalin, Chris Maguire, Haim Schoppik and Jared Tarbell who started the business from Mr Kalin's Brooklyn apartment. None of them remain with the firm.

In August, Etsy said it would change its policyafter sellers complained of money being withheld.

The U-turn came after the BBC reported that some sellers had 75% of their money frozen for 45 days.

Etsy said it was "substantially decreasing" the amount of money it would put on hold but did not state the new rate or time frame.