Etsy has announced its second round of layoffs in as many months. In a statement today, it said it will cut 140 positions, or about 15 percent of its current workforce. When combined with an earlier downsizing announced in early May, this round brings total eliminated positions to about 230, or about 22 percent of what Etsy’s total workforce was at the end of 2016.
In the press statement, Etsy CEO Josh Silverman said, “In order to drive focus, we took decisive steps to double down on the fewest, highest-impact initiatives in our core marketplace while de-prioritizing other projects and streamlining our resources. Parting ways with our colleagues is not easy and I am thankful for their contributions. We are moving forward with a more nimble structure that supports our current business needs and allows for faster execution so we can better serve creative entrepreneurs around the world.”
Last month, Etsy appointed board member Josh Silverman as its new CEO, replacing Chad Dickerson. Silverman, who previously served as CEO Skype and Evite, stepped into the leadership position at Etsy after its struggling stock performance prompted hedge fund Black-and-White Capital LP to urge the company to pursue strategic alternatives, like a sale.
Black-and-White told Etsy, which reported a $400,000 loss in the first quarter, that it needs to fix search functionality and other features on its site in order to increase repeat customers and drive sales. But the company, which was once one of the few options for sellers of arts and crafts, now has a serious rival in the form of Amazon’s Handmade marketplace, which launched in October 2015.
The layoffs will most affect Etsy’s Brooklyn headquarters, as well as some workers in its global offices. Most of the cuts will be marketing, product management, and general and administrative positions. The company said it will continue its consumer marketing efforts, but is “pausing brand marketing initiatives” for the rest of the year.
This round of layoffs is expected to incur about $6 million to $8.8 million in exits costs like employee severance packages. This is in addition to the $6.5 million to $8 million in exit costs from the reductions announced in May.