Sales GMV growth stagnated, Etsy announced 11% layoffs during peak season

It is learned that on December 13, Etsy announced that it would lay off 11% of its employees during this holiday season. This is its latest move to cope with the current sluggish macroeconomic environment and fierce market competition. Prior to this, Etsy had already started business restructuring and cost streamlining.

Etsy's total headcount will reportedly be reduced by approximately 225 people, which would reduce Etsy's core marketplace headcount to approximately 1,770, similar to levels at the beginning of 2022 and exceeding 2020.

Etsy's CEO acknowledged in its third-quarter earnings call that growth is challenging in the current macroeconomic environment. Etsy's sales GMV has more than doubled since 2019. However, since 2021, Etsy's sales GMV has remained essentially unchanged. In recent years, Etsy's revenue growth has stagnated.

In addition, although Etsy has taken cost-cutting measures and suspended recruitment plans, employee expenses remain high. After deciding to lay off employees, Etsy's layoff expenses will be between $25 million and $30 million, most of which will be used for severance pay, employee benefits and other related expenses.

As part of the reorganization, Etsy's chief marketing officer Ryan Scott will leave and his position will be integrated into the responsibilities of Chief Operating Officer Raina Moskowitz. Etsy's chief human resources officer Kimaria Seymour will also leave the company and will be replaced by Toni Thompson, Etsy's current vice president of global people and talent strategy.

The restructuring is reportedly expected to be completed by the end of the first quarter of 2024.

In addition, Etsy's CEO said that Shein and Temu also affected the company's profitability. Shein and Temu's continued investment in marketing and promotion raised advertising costs and indirectly increased Etsy's promotion expenses, especially in some paid channels of Google and Meta.

For fourth-quarter results, Etsy expects gross merchandise sales to be down 1% to 2% from the year-ago period and revenue to grow 2% to 3%, but it expects adjusted EBITDA margins to be 27% to 28%, up from its previous guidance of 26% to 27%.

Editor✎ Ashley/

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