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 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 marketplace GMS was up 7.5% year over year, marking the third consecutive quarter of growth, while revenue increased 9.3% on an Etsy marketplace basis. Adjusted EBITDA rose to $195 million, with a 29.2% margin.
Active buyers were down 0.4% year over year at 87 million, but increased by about 350,000 from the previous quarter. Etsy also saw sequential growth among repeat and habitual buyers for the first time since 2023, while GMS per active buyer increased 2.8% to $124.
The company raised its full-year outlook and now expects Etsy marketplace GMS to grow in the mid-single-digit range. For the third quarter, Etsy is projecting GMS of $2.53 billion to $2.58 billion, representing year-over-year growth of 4% to 6%, with an adjusted EBITDA margin between 28% and 30%.
Etsy said the restructuring will lower operating costs in the near term, with those savings already reflected in its improved full-year adjusted EBITDA margin outlook of 29% to 30%. At the same time, the company plans to continue investing in product, engineering, customer operations, machine learning, marketing, trust and international growth.
Etsy also authorized an additional $2 billion stock repurchase program after buying back approximately $250 million in shares during the second quarter. The company completed the sale of Depop to eBay on July 30, a deal expected to bring Etsy approximately $1.4 billion in cash and help accelerate those repurchases.
