Etsy, the popular online marketplace, witnessed a decline in its shares on Wednesday following the announcement of a significant workforce reduction. The stock dropped by 7.6% to $79.29, marking a 33% decrease for the year.
In a letter published on the company’s website, CEO Josh Silverman shared the news of approximately 225 employees being affected by the job cuts. Silverman acknowledged that although Etsy’s marketplace has experienced tremendous growth since 2019, the company is currently facing challenges in a competitive macro environment. Additionally, gross merchandise sales have remained relatively stagnant since 2021.
Addressing the importance of supporting sellers on the platform, Silverman emphasized that the company needs to focus on generating increased sales for its sellers. Simultaneously, the CEO highlighted that employee expenses have continued to grow, despite the implementation of significant cost-cutting measures and adjustments to hiring plans. Silverman stressed that this pattern is not sustainable and necessitates a change in direction.
In conclusion, Etsy’s decision to reduce its workforce highlights the company’s dedication to adapting to market demands and ensuring long-term sustainability.