Etsy lays off 12% of employees to streamline operations
What's the story
Etsy, the popular marketplace for handmade and vintage items, has announced a major restructuring plan. The company will be laying off around 220 employees, which is nearly 12% of its total workforce. The decision was revealed in a US Securities and Exchange Commission filing on Wednesday. Most of the layoffs will affect workers in the product and engineering department.
Clarification
Layoffs not aimed at cost-cutting, says CEO
Etsy's CEO, Kruti Patel Goyal, clarified that the layoffs aren't aimed at cost-cutting or reducing the company's size.
She said, "Cost savings are a consequence of these changes, but they are not the objective."
Goyal further emphasized that Etsy will continue to invest in its business and hire in areas critical to its long-term strategy.
AI impact
AI not a factor in layoffs
Goyal also made it clear that the layoffs weren't influenced by artificial intelligence (AI).
However, she acknowledged that "AI is changing how all of us work, and it will continue to change how we build products and solve problems."
She stressed the need for evolution in skills, collaboration methods, and capabilities at Etsy as tools evolve.
Employee support
Comprehensive severance package for laid-off employees
Etsy has promised a comprehensive severance package for the employees being laid off.
Each affected worker will get at least 16 weeks of severance pay, additional compensation based on their tenure, and continued healthcare support for up to 12 months.
This move is part of Etsy's commitment to provide a safety net for its departing employees during this transition period.
Buyback announcement
Etsy's audit committee approves new stock repurchase program
Along with the layoffs, Etsy's audit committee has approved a new stock repurchase program.
The plan allows Etsy to buy back up to an additional $2 billion of its common stock.
This move shows that despite the restructuring and layoffs, the company is still committed to supporting its investors and maintaining shareholder value in the long run.