US e-commerce company Etsy has announced plans to cut 225 jobs – 11% of its marketplace workforce – as part of organisational restructuring.
The retailer stated that it is “operating in a very challenging macro and competitive environment”. It also noted that its gross merchandise sales (GMS) value has remained flat since 2021.
The reduction will bring the headcount for the core Etsy marketplace to 1,770 people, which is similar to its strength in early 2022 but above 2020 levels, CNBC reported.
Affected employees will remain on the company’s payroll until at least 2 January 2024.
Employees will receive a severance package including 16 weeks of base pay, bonus payments for 2023 and 12 months of continuation of health insurance coverage or a cash equivalent in non-US markets.
The retailer will spend between $25m and $30m mainly on severance payments, employee benefits and other related costs.
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The restructuring is expected to be completed by the end of the first quarter of 2024.
Etsy CEO Josh Silverman stated: “Following extensive discussions and analysis with senior leaders, it was apparent that a leaner, more agile team would enable us to properly focus on our key growth priorities, move bold and fast and maintain a sustainable cost structure.
“Parting ways with some of our colleagues was absolutely not an option we wanted to pursue; however, we have a responsibility to our entire community, especially the nearly 7m sellers who count on us every day – and we must make the hard decisions that allow us to continue serving them.”
Headquartered in Brooklyn, New York, Etsy operates two-sided online marketplaces, connecting buyers and sellers across the globe.
In its fiscal 2023 third quarter result announced in November 2023, the retailer saw its consolidated GMS grow 1.2% year-over-year but remain largely flat on a currency-neutral basis.
Its net income also grew 109.1% to $87.8m over the quarter.