Etsy Shares Fall After Cutting 11% of Its Workforce

Shares of the handmade crafts e-commerce site Etsy fell more than 4% during intraday trading Wednesday following the company's announcement that it will eliminate 11% of its workforce in a restructuring.

Etsy Chief Executive Officer Josh Silverman told employees in an email, which was posted online, that it would reduce its workforce by roughly 225 team members to about 1,770. The cuts are part of an effort to make the company leaner in order to "properly focus on our key growth priorities," he wrote.

The company has doubled in size since 2019, he added, but is facing a challenging macro environment with gross merchandise sales remaining flat since 2021. Etsy's gross merchandise sales grew by only 1.2% year-over-year to $3 million in the three months ended Sept. 30, according to its most recent quarterly earnings report.

The Brooklyn-based company is offering affected workers a 16-week severance package that includes base pay and an additional week for every full year of service.

Etsy estimates it will take $25 million to $30 million in charges related to the cuts, according to a Securities and Exchange Commission filing. The company also forecast that fourth-quarter gross merchandise sales would decline by about 1% to 2% and revenue increase by 2% to 3%.

As part of the company's restructuring, Chief Marketing Officer Ryan Scott and Kimaria Seymour, its chief resource officer, will depart.

The news comes just days after toy maker Hasbro announced it was eliminating 1,110 jobs due to struggling sales this holiday season.