Etsy (NASDAQ:ETSY) is slashing its headcount by 11% during the holiday shopping season, the company announced Wednesday, citing a “very challenging macro and competitive environment.”
The cuts will affect roughly 225 Etsy (NASDAQ:ETSY) employees, bringing the DIY e-commerce site’s headcount to about 1,770. That’s roughly where things stood in early 2022, according to reports.
“We are operating in a very challenging macro and competitive environment, and gross merchandise sales (GMV) has remained essentially flat since 2021,” CEO Josh Silverman wrote in a letter to employees.
“This means we are not bringing our sellers more sales, which is the single most important thing we can do for them. At the same time, employee expenses have grown, even as we have introduced significant cost-cutting measures and adjusted or paused hiring plans. This is ultimately not a sustainable trajectory and we must change it.”
The layoffs, while cost-saving over time, will cost Etsy (NASDAQ:ETSY) $25 million to $30 million, most of which is taken up by severance payments. The company said it would pay affected workers through January 2 along with 16 weeks of severance.
As part of the move, chief marketing officer Ryan Scott will leave the company. His position will be absorbed by chief operating officer Raina Moskowitz.
Etsy also issued new fourth-quarter guidance. The company expects gross merchandise sales to fall 1% to 2% year-over-year and revenue to rise 2% to 3%.
Shares of Etsy fell 2.2% Wednesday to US$83.97.