ETSY Cuts 12% Of Workforce After Q2 Beat, Says Layoffs Are ‘Not A Cost-Cutting Move’ — Stock Slips In After-Hours Trading

• Second-quarter revenue rose to $668.3 million, topping analyst estimates, while sales on Etsy’s core marketplace increased 9.3% year over year.
• The company reported a loss of $0.49 per share, versus analyst expectations for a profit of $1.18 per share.
• Etsy raised its full-year gross merchandise sales (GMS) growth forecast to the mid-single-digit range and guided third-quarter GMS to $2.53 billion-$2.58 billion.

Etsy Inc. (ETSY) is laying off about 220 employees, or around 12% of its workforce, as part of a restructuring aimed at simplifying its organizational structure and accelerating innovation. The company made the announcement alongside its second-quarter earnings, which included a revenue beat and higher full-year guidance.

ETSY stock closed 0.66% lower on Wednesday and extended losses in after-hours trading. It was down nearly 1.6% at the time of writing.

ETSY Calls Layoffs A Growth Move

In a letter to shareholders, Etsy said it is restructuring to reduce its workforce by about 220 employees, leaving the company with an expected headcount of about 1,600. The company expects the restructuring to be substantially complete by the end of the third quarter. Most of the layoffs will affect Etsy’s product and engineering teams.

Chief Executive Officer Kruti Patel Goyal, who took over earlier this year, said it’s “not a cost-cutting move” but is intended to help the company “lean in during a period of strong momentum so that we can move faster and execute with even greater focus.”

Separately, Patel Goyal also told employees in a staff memo that the company’s first priority had been to get the business growing again, but its next goal is “to take Etsy to the next level of growth” by building the team, culture and organization needed to achieve that, according to a CNBC report.

Etsy, which operates an online marketplace for handcrafted and artisanal goods, has faced increasing competition from rivals including Amazon.com Inc. (AMZN), Walmart Inc. (WMT), TikTok Shop and Temu.

ETSY Beats Revenue Estimates, Raises Full-Year Outlook

For the second quarter, Etsy reported revenue of $668.3 million, ahead of the analyst consensus estimate of $646.69 million, according to fiscal.ai. Sales on its core marketplace increased 9.3% from a year earlier.

The company reported a loss of $0.49 per share, compared with adjusted earnings of $0.28 per share a year ago. Analysts had expected earnings of $1.18 per share, according to fiscal.ai.

Etsy also raised its full-year gross merchandise sales (GMS) growth forecast to the mid-single-digit range from low-single-digit growth previously. For the third quarter, the company guided GMS to between $2.53 billion and $2.58 billion, representing year-over-year growth of 4% to 6%.

ETSY Stock: What Stocktwits Retail Says

On Stocktwits, retail sentiment on Etsy improved to ‘bullish’ from ‘normal’ over the past 24 hours, while message volume was ‘normal’ at the time of writing.

ETSY shares have gained about 54% year-to-date.

Also See: AMD Stock Tanks After Earnings, But The Dip Isn’t Changing Wall Street’s Or Retail Investors’ Bullish View — Here’s Why

For updates and corrections, email newsroom[at]stocktwits[dot]com.