Etsy is the latest company to lay off staff in 2023. CEO Josh Silverman confirmed The market is laying off 11 percent of its staff (about 225 employees) in its first significant staff cut in recent years. It is also reshuffling its leadership, including announcing the departure of two executives in early 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 am sad to share that we must say goodbye to approximately 225 team members, which will reduce Etsy's workforce by approximately 11%. “This decision was one of the most difficult we have ever made and one we have seriously tried to avoid.”
The company faces a slowdown in consumer spending as its leadership warned in its third quarter 2023 earnings call in November. “There's no question that this is an incredibly challenging environment for consumer discretionary spending,” Silverman told investors last month. “Therefore, it is important to recognize that the volatile macro climate will make growth this quarter challenging for us.” Etsy's revenue growth had already stalled in recent years, and customers adjusted their spending habits following lockdowns following a pandemic-era boom.
Etsy's CEO says Shein and Temu have also hurt the company's results. “There is no doubt that Temu and Shein are having an impact on the market,” Silverman said on the November call. “You don't get to be that big that fast without sharing part of a lot of people.”
However, the competition of the two upstarts is not the only problem; Shein and Temu have also reportedly increased Etsy's advertising costs. “And the other thing that's happening is that they're spending a lot of money on marketing, and it's not clear that they're using ROI thresholds to do it,” Silverman added. “So I think those two players almost single-handedly are having an impact on the cost of advertising, particularly in some paid channels on Google and Meta.”
Silverman plans to market the “quality, value and reliability” of the platform to help fend off younger competitors, who specialize in cheaper products. “I have great confidence in these plans, but we need the right structure and resources to execute them successfully,” he wrote to employees.
The CEO wasn't above using a little rudeness either. “We are the opposite of Temu,” Silverman told investors in November. “If I had to think about what the polar opposite of Etsy is, I'd probably go pretty close to Temu.”
As part of the reorganization, Etsy 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 lead the marketing teams, and Chief Product Officer Nick Daniel will inherit Moskowitz's role. previous territory, overseeing payments and compliance teams.
This article originally appeared on Engadget at https://www.engadget.com/etsy-is-laying-off-11-percent-of-its-staff-201545615.html?src=rss
