Etsy is laying off 11% of its staff
Etsy’s decision to lay off 11% of its workforce despite strong revenue growth raises questions about how companies balance shareholder interests, executive missteps, and worker security. Commenters point to heavy spending, especially a $1B goodwill impairment from overpriced acquisitions, and rising competition from platforms like Temu as key pressures on profitability. The move also revives broader debates over generous severance in tech, weak labor protections in the U.S., and how Etsy’s shift away from strictly handmade goods toward mass-produced items has altered both its costs and its brand.
Macro environment vs. executive responsibility
- Some argue the current “macro environment” (end of cheap money, higher interest rates) reasonably explains both past growth and current layoffs.
- Others note executives tend to credit themselves for growth (and reap rewards) while blaming external factors for downturns and shifting consequences to rank-and-file staff.
Etsy’s finances and acquisitions
- Commenters note strong revenue growth over five years, but emphasize revenue ≠ profit.
- SEC filings show Etsy’s costs exceed revenue, with major line items: cost of revenue, heavy marketing, product development, G&A, and a very large goodwill impairment.
- The impairment stems from prior acquisitions (Depop, Elo7), interpreted as admitting those businesses are now worth far less than Etsy paid.
- Some see this as a “horrible acquisition” whose champions likely got rewarded, while unrelated employees now bear the cost via layoffs.
Layoffs, severance, and norms
- Etsy’s severance (16 weeks plus tenure-based weeks, extended health coverage, laptop retention) is viewed as relatively generous, especially compared with non-tech or game studios where 1–4 weeks is common.
- Debate on whether such packages are industry “norms”: some say only large, brand-sensitive firms do this; many report much leaner severance, especially at smaller or non-famous tech companies.
- Suggestions: ask about past layoff handling in interviews; negotiate explicit severance clauses; maintain personal savings as the only reliable safety net.
Etsy marketplace quality and seller experience
- Many feel Etsy has drifted from “handmade” roots toward mass-produced, drop-shipped, or Alibaba/Temu-style goods, making it harder to find genuine artisans.
- Buyers struggle to distinguish real makers from resellers; some rely on in-person craft fairs, social media, or careful vetting of shops.
- Legit small sellers report declining sales, unpredictable algorithms, and intense competition from cheap, factory-made products.
- Alternatives (GoImagine, Artisans Co-op, local fairs, personal sites) exist but generally lack Etsy’s traffic and produce few sales.
Competition and traffic shifts
- One view is that Temu’s aggressive Google Shopping ad spend has displaced Etsy in key search slots, coinciding with a reported “cliff” in Etsy seller traffic and sales.
Labor protections vs. pay and innovation
- Side debate compares US “at-will + higher pay” to European-style protections, unions, and social safety nets.
- Some argue strong protections would reduce salaries and innovation; others prioritize guarantees and social stability over maximum earnings.