Etsy Announces Layoffs of Over 200 Employees Due to Stagnant Sales.
The CEO of Etsy, Josh Silverman, informed employees on Wednesday about the decision to lay off more than 200 workers. In an email published on the company’s website, Silverman detailed the reasoning behind the layoffs, which would impact approximately 225 team members. He highlighted the challenging market environment and the stagnant growth in gross merchandise sales (GMS) since 2021 as significant factors contributing to this move.
Silverman emphasized that despite implementing cost-cutting measures and adjusting hiring plans, employee expenses continued to rise. He stressed that this trend was unsustainable and necessitated a shift in strategy.
In conjunction with the layoffs, Etsy announced the departure of its chief marketing officer, Ryan Scott, with the responsibilities now taken over by COO Raina Moskowitz. Silverman acknowledged the unfortunate timing of the announcements, considering the holiday season.
To support affected employees, Etsy assured that all impacted staff members would remain on the payroll until at least January 2, 2024, despite Wednesday being their last working day. Additionally, the company offered an enhanced severance package, including severance pay equivalent to 16 weeks of base pay, with an additional week for each year of service. Employees would also receive their year-end bonus payments.
This downsizing move by Etsy reflects the company’s response to the challenging economic landscape. It is not an isolated incident, as other companies, including streaming giant Spotify, have also recently reduced their workforce. Spotify CEO Daniel Ek attributed their decision to the difficult economic environment, stating the need for the company to become more resourceful and focused on impactful opportunities.
At the time of reporting, representatives for Etsy had not responded to Business Insider’s request for comment outside regular business hours.
