Etsy in Holding Pattern – More Layoffs
Etsy is laying off another 140 employees, or 15% of its workforce. This is in addition to the 90 layoffs announced earlier in the year.
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Total jobs lost are now 230 for the year, a 22% reduction in workforce from the end of 2016.
The new job losses are primarily in marketing, product management, and general & administrative positions. In other words, anything that supports business operations!
The company also said it is pausing its brand marketing for the remainder of the year.
Josh Silverman, Etsy’s Chief Executive Officer, commented, “My conviction that Etsy has a unique opportunity within the ecommerce space has intensified during my initial weeks as CEO. Our vibrant community, strong brand affinity, 45 million listings, and ability to connect people through commerce provide us with a differentiated offering and solid foundation for growth. By focusing on our ‘vital few’ initiatives, we will be a more disciplined company that is better positioned to create the world’s most compelling buying and selling experience.”
NO AMOUNT OF SPIN CAN HIGHLIGHT THE OBVIOUS
Previous senior management allowed to company to become bloated and go off on tangents. Little was done to improve buyer and seller experiences.
Etsy also announced they are stopping brand marketing until the end of the Year. That includes the busy and important holiday season! On the surface, today’s announcement is a typical move by a management to lean expenses and massage the books for a sale.
Effectively, the company is pushing the pause button on operations & marketing and writing off exit costs of up to $16.8 million between both layoffs.
Etsy also stated it would focus on primary initiatives which include enhanced search & discovery and improving the buyer experience. Key gripes by investors and also key technology assets that may make Etsy a compelling buy.
Bottom line, expect a sale. Let the speculations begin…
I AM AN ETSY SELLER, DO I NEED TO WORRY?
The company is not bleeding cash; they are barely breaking even or squeaking out a small profit. Fundamentally, the business is in reasonable shape and with over 45 million listings a dynamic and compelling marketplace.
However, it may be a good idea to take another look at Amazon Handmade. It is never a good idea to have all your eggs in one basket. Diversification right now is a good business strategy while the Etsy situation plays out.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.