Etsy Lays Off 220 Employees, Cutting 12% Of Workforce In Restructuring

Etsy is laying off approximately 220 employees, or about 12% of its workforce, as part of a restructuring plan approved this week.

The cuts will fall primarily within Etsy’s Product and Engineering organization, leaving the company with roughly 1,600 employees once the restructuring is complete.

Etsy says the changes are intended to simplify its structure, reduce handoffs between teams and speed up decision-making. The company expects to record about $35 million in related charges, mostly for severance, benefits and other employee costs.

In its letter to shareholders, Etsy said the move is not primarily a cost-cutting effort. Instead, the company is shifting toward flatter teams with broader responsibilities so it can “lean in during a period of strong momentum” and operate with greater speed and focus.

An Etsy spokesperson also said the cuts were not driven by artificial intelligence.

“You’ve heard me say that our first priority was to get the business growing again,” CEO Kruti Patel Goyal wrote in a memo to employees. “Our ultimate goal, though, has always been to take Etsy to the next level of growth so we can fully deliver on our mission and our potential. We are now at the point where we need to make that shift—to build the team, culture, and organization that will make that possible.”

The announcement came alongside Etsy’s second-quarter results, which included $2.6 billion in Etsy marketplace gross merchandise sales and $668 million in revenue.

Etsy is scheduled to hold its full earnings call Thursday morning at 5:30 a.m. Pacific / 8:30 a.m. Eastern. Value Added Resource will have more on the company’s results and restructuring plans after the call.