The holiday season rush is at its peak, and this is certainly not the right time for job cuts. However, Etsy, the American e-commerce firm is letting go 11 per cent of its workforce, that is, about 225 employees.
The high competition and the uncertainty of the macro environment are the reasons cited for the decision to trim the workforce.
Josh Silverman, CEO, Etsy, has informed employees in a letter that even though the marketplace has expanded two-fold since 2019, drastic changes are required to stay competitive. The company is looking at restructuring and streamlining for cost-effectiveness.
While employee costs have grown, the sales have not increased for Etsy sellers at the expected rate, despite adopting cost-cutting measures and alteration in recruitment strategies, including a hiring freeze. Sustainability is the need of the hour, and the company is now resorting to layoffs to make that happen.
The Etsy marketplace sells handmade products and brings buyers and local artisans in touch with each other, worldwide. The firm now wishes to focus on improving sales for the seven million sellers associated with it from around the globe. It seeks to ensure value for all its stakeholders.These layoffs are part of this much-required internal restructuring.
The firm will incur a cost of at least $25 million in paying severance to the affected employees, along with other benefits. The restructuring exercise will be completed by the end of Q1, 2024.
