Etsy cuts workforce by 12 percent to streamline operations

In the United States, Etsy, an online marketplace founded in 2005 and headquartered in New York, announced significant layoffs affecting approximately 220 employees. This decision is part of a broader strategy to reduce the company's workforce by 12 percent, bringing the total headcount down to around 1,600. The layoffs are expected to incur costs of about $35 million in severance and related expenses, with the process slated for completion by the end of the third fiscal quarter of the year. CEO Kruti Patel Goyal emphasized that the restructuring is not merely a cost-cutting measure but aims to create flatter, faster teams that can address complex problems more effectively. Most of the job reductions will occur within the product and engineering groups, as the company seeks to eliminate silos and improve collaboration. Goyal expressed gratitude towards the departing employees for their contributions and assured that the company would support them during this transition. CFO Lanny Baker noted that the restructuring is intended to lower operating costs in the near term while also positioning Etsy for future growth. He highlighted the importance of deepening expertise in critical areas such as product development, engineering, and customer operations, particularly in machine learning. Despite the layoffs, Etsy reported that all key performance indicators are showing improving momentum in their financial results for the second quarter. In a memo to employees, Goyal clarified that the job cuts were not driven by advancements in artificial intelligence, although she acknowledged that AI is transforming the way the company operates and develops products. As the tools and skills evolve, Etsy aims to adapt its workforce and capabilities accordingly.