Etsy is laying off 225 employees – around 11% of its total workforce – and consolidating its marketing and operations executive functions into a single role.
The decision comes as its chief executive Josh Silverman announced that sales on the online marketplace had remained “essentially flat” for two years.
As part of the restructuring, Ryan Scott, the brand’s long-term chief marketing officer, is leaving the company. Scott had been with Etsy for five years, with a remit to grow audience awareness of the range of products available on the platform.
Silverman thanked Scott for introducing “tens of millions” of new customers to Etsy and for helping to “transform” the brand globally during a period of critical growth.
Despite this, however, the CMO role will be scrapped, with the responsibility for marketing operations falling to Raina Moskowitz, the current chief operating officer. In an internal memo to staff, Silverman explained: “In her expanded role as Etsy’s chief operating and marketing officer, Raina will work to drive growth globally by expanding brand consideration and deepening customer trust and loyalty.”
Moscowitz has previous marketing experience, having been vice president of customer marketing at American Express from April 2016 to April 2018.
Silverman blamed serious economic headwinds for the need to make the redundancies, which will incur costs of up to £23.7 million ($30 million) in redundancy pay and associated benefits. He noted that while the Etsy marketplace is more than double the size it was pre-pandemic, sales have “remained essentially flat since 2021”.
As a result the company is prioritising a “Vital Few” projects that are designed to restore growth and sales for the sellers on its platform. Silverman stated in the memo that Etsy’s market share “remains small”, but that its focus on “keeping commerce human” would allow it to grow given the right team structure.
Silverman explained: “We assessed how each team at Etsy mapped against our growth priorities and reviewed every single team member, starting from our most senior levels, to determine how well their roles and skills matched our current and future business needs.”
In its Q3 earnings, released in November, the company announced growth in active buyers, with a 4% year-over-year increase, equating to an “all-time high of 92 million” active buyers. It additionally reactivated six million previous customers – up 19% from the prior year period – and acquired six million new customers. The company, which connects creators of personalised or vintage gifts with potential buyers, has just under seven million sellers on its platform.
In the same results, it announced quarterly revenue of £502m ($636.3m), up 7% year-on-year. The company attributed that revenue growth to its advertising platform Etsy Ads, in addition to payments revenue.
Despite that, the slowing revenue growth post-pandemic meant that Etsy had to pause hiring plans: the redundancies are an extension of those plans to right-size after the pandemic boom. Silverman said: “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.”