As we reported in May, Etsy is going through a tough period of change. The CEO and CTO left the building at the end of May and 80 staff were given their cards. That was 8% of the staff. They’re making more job cuts this month with a reported 150 additional job losses coming this week. All told about 22% of staff will be made redundant at Etsy’s US HQ in Brooklyn NYC in 2017.
The former CEO Chad Dickerson was replaced by eBay veteran and Etsy board member Josh Silverman, who was also previously the head of Skype, last month. CTO John Allspaw also left at the end of May. Such redundancies don’t come cheap. The previous lot are said to have cost between $6 million and $8.8 million and the latest something like $6.5 million to $8 million. However, this will represent a saving in the longer run.
The thrust of the changes appear to be a greater focus on core opportunities at the vintage and craft marketplace that has had a wobbly time since its IPO two years ago. Etsy reported a loss of $421k in Q1 this year having made $1.2 million a year ago.
There will reportedly be cuts to brand marketing budgets. A core focus on the US domestic market which still has potential to grow is also expected and internationally there will be retrenchment. When it comes to key international markets the UK, Canada, Australia, France, and Germany remain key but it seems unlikely they will be branching out elsewhere anytime soon. Most job losses will be at HQ but some will be lost in international offices too.
This is the harsh world of capitalism. Shareholders aren’t happy. The markets are unforgiving and, as a public company, Etsy now lacks much of the flexibility that comes with remaining private. That said, despite the personal sad stories of good people losing their jobs, sometimes a refocus and reorganisation makes sense.
Etsy is a vital key player in the ecommerce landscape and it is vital that it prospers and develops. We’ll see if this corporate austerity pays any dividends in the medium term.
