Etsy is laying off 200 employees, announcing the cuts just 6 days after receiving $1.4 billion in cash from eBay for the sale of Depop. Etsy notified employees in a letter on August 5, the same day it shared its second-quarter performance that saw its Marketplace revenue grow 9.3% year-over-year and Marketplace GMS (gross merchandise sales) grow 7.5%.
Etsy CEO Kruti Patel Goyal said in Wednesday’s letter to employees that most of the layoffs were concentrated in Product and Engineering, and she addressed the timing of the layoffs in a section called “Why now”:
“Some of you may be wondering why we’re making these changes now, especially as we’re beginning to see progress reflected in our financial results. It’s a fair question. The answer is that today’s decisions aren’t a reflection of this quarter or even this year, but of where Etsy needs to go next.
“The progress we’ve made gives us the chance to act from a position of strength. This means we can shape our future proactively rather than react to it.
“We’re also getting ready to plan for 2027. We didn’t want to ask teams to build those plans around an organization we already knew needed to change.”
Goyal said Etsy’s goal in laying off hundreds of employees was not to cut costs. “We didn’t start this work with a cost reduction target or a goal of making Etsy smaller,” she said. “You’ll continue to see us invest in the business and the team and hire in areas that are important to our long-term strategy.”)
She also said the layoff decisions were not driven by AI, writing, “Ultimately, our future depends on the creativity, judgment, and expertise of our people. The opportunity is to combine talented people with powerful new technology and not replace one with the other.”
Etsy shared a redacted version of Goyal’s letter on its website.
Elliott Management (the same activist investor that had targeted eBay in 2019) had reportedly taken a large interest in Etsy stock in 2024 when it won a board seat. Elliott Management partner Marc Steinberg continues to sit on Etsy’s board.
