Etsy announced on Wednesday that it will lay off about 220 employees, or roughly 12% of its workforce, as part of a strategy to simplify its organizational structure and accelerate innovation. CEO Kruti Patel Goyal emphasized that these layoffs are not a cost-cutting measure but a necessary step to position the company for future growth.
The majority of the cuts will affect the product and engineering teams. This announcement coincided with Etsy's second-quarter earnings report, which showed sales of $668.3 million, surpassing analyst expectations of $649.1 million, and a 9.3% increase in sales on its core marketplace.
Despite facing challenges such as a decline in active buyers, which fell to 87 million, Etsy has successfully added more sellers, reaching 5.7 million, a 5.9% increase year-over-year. The company also raised its full-year guidance for gross merchandise sales, projecting mid-single-digit growth.
Additionally, Etsy has been divesting from non-core brands, having sold its musical instrument marketplace Reverb and recently completing the sale of Depop to eBay for $1.2 billion. These strategic moves reflect Etsy's focus on enhancing its unique marketplace offerings amid increasing competition from giants like Amazon and newer entrants like TikTok Shop