Etsy, the online marketplace for people to sell crafts and handmade products, announced this week its second round of job cuts in a little more than a month as it attempts to refocus operations.
On Wednesday, the New York-based company said it would be cutting 140 jobs, adding to a round of cuts announced on May 2. All told, Etsy said it would be eliminating 230 positions, or about 22 percent of what its workforce was at the end of 2016. The reductions will focus on areas such as marketing, product management and administration, and they will mainly target the Brooklyn headquarters.
Etsy rose to prominence as an early e-commerce site catering to the crafting crowd, but it has encountered stiff competition in recent years as a number of large companies and small began to offer similar platforms for people to sell what they make. The company counts Amazon.com, Craigslist and eBay as competitors, as well as commerce channels on social networks like Facebook and Instagram. (Amazon.com chief executive Jeffrey P. Bezos owns The Washington Post.)
Even with 45 million listings, Etsy has struggled to post profits since it went public two years ago, and recently replaced longtime chief executive Chad Dickerson with Josh Silverman, a former chief executive of Skype and former CEO of eBay’s Shopping.com. In May, Etsy reported revenue of $96.9 million for its most recent three-month period, and a loss of $421,000.
Shares of Etsy jumped recently as disclosures that three activist investor groups, including TPG, had acquired stakes in the company.
The company has tried a number of tactics to attract and retain sellers. In 2016, it launched a service called Pattern that allowed sellers to create their own custom website. It also introduced innovations such as Google Shopping that allow sellers to reach potential customers off of Etsy by advertising their listings in Google search results. More recently, the company launched Etsy Studio, a craft supplies market.
Silverman said in a statement accompanying the job cuts that Etsy now hopes to regain ground by focusing on a “vital few” undisclosed initiatives that will make the company “more disciplined” and “better positioned.”
“We are moving forward with a more nimble structure that supports our current business needs and allows for faster execution so we can better serve creative entrepreneurs around the world,” Silverman said in a statement.
The job cuts will pose additional costs for Etsy, with expenses such as employee severance packages estimated to reach as much as $16.8 million. The company will also be “pausing brand marketing initiatives for the remainder of 2017,” according to its statement.
Etsy declined further comment.