Etsy is the latest company to lay off staff in 2023. CEO Josh Silverman confirmed the marketplace is letting go of 11 percent of its staff (around 225 employees) in its first significant staffing cut in recent years. It’s also reshuffling its leadership, including announcing two executives’ departures at the beginning of 2024.
“After deep discussion and careful consideration, we are reorganizing our internal structure to more closely align our resources with our most important business priorities and better serve our customers,” Silverman wrote to employees. “As part of this, I’m sad to share that we must say goodbye to approximately 225 team members, reducing the Etsy workforce by ~11%. This decision was among the hardest we’ve ever made, and one that we have tried earnestly to avoid.”
The company is facing a consumer spending slowdown, as its leadership warned in its Q3 2023 earnings call in November. “There’s no doubt that this is an incredibly challenging environment for spending on consumer discretionary items,” Silverman said to investors last month. “It’s therefore important to admit that the volatile macro climate is going to make it challenging for us to grow this quarter.” Etsy’s revenue growth had already stalled in recent years, with customers adjusting their spending habits post-lockdowns after a pandemic-era boom.
Etsy’s CEO says Shein and Temu have also affected the company’s bottom line. “There’s no question that Temu and Shein are having an impact in the market,” Silverman said in the November call. “You don’t get that big that fast without taking share from many people.”
However, the two upstarts’ competition isn’t the only issue; Shein and Temu have also allegedly driven up Etsy’s advertising costs. “And the other thing that is happening is they’re spending a large amount of money on marketing, not clear that they’re using ROI thresholds to do that,” Silverman added. “And so I think those two players are almost single-handedly having an impact on the cost of advertising, particularly in some paid channels in Google and in Meta.”
Silverman plans to market the platform’s “quality, value and reliability” to help fend off the younger competitors, which specialize in cheaper goods. “I have great confidence in these plans, but we need the right structure and resources in place to successfully execute on them,” he wrote to employees.
The CEO wasn’t above talking a little smack, either. “We are the opposite of Temu,” Silverman said to investors in November. “If I had to think about what is the polar opposite of Etsy, I’d probably get pretty close to Temu.”
As part of the reorganization, Etsy’s chief marketing officer, Ryan Scott, and chief human resources officer, Kim Seymour, will leave the company on January 1. Chief operating officer Raina Moskowitz will now guide marketing teams, and chief product officer Nick Daniel inherits Moskowitz’s previous turf, overseeing payments and fulfillment teams.
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