Etsy Announces 12% Staff Reduction Amidst Organizational Restructuring
Online crafts marketplace Etsy Inc. has revealed plans to lay off approximately 220 employees, constituting roughly 12% of its total workforce. This move is part of a significant organizational restructuring initiative aimed at enhancing decision-making efficiency. The announcement coincided with the company’s Q2 2026 earnings report and was also disclosed in a filing with the U.S. Securities and Exchange Commission.
The layoffs will predominantly impact Etsy’s product and engineering departments, with the restructuring expected to be largely completed by the end of the third fiscal quarter. The restructuring will incur an estimated $35 million in severance and related expenses, reducing Etsy’s workforce to approximately 1,600 employees.
CEO Kruti Patel Goyal clarified that the layoffs are not a traditional cost-cutting measure. In a letter to shareholders, she emphasized, “This is not a cost-cutting move; it is meant to lean in during a period of strong momentum so that we can move faster and execute with even greater focus.” She also refuted speculation that AI automation was the driving force behind the layoffs, while acknowledging the role of AI in transforming the company’s product development process.
Alongside the restructuring news, Etsy reported a Q2 revenue of $668.3 million, surpassing analyst estimates. This represents a 9.3% year-over-year increase in core marketplace sales. In addition, Etsy authorized an extra $2 billion in stock buybacks. Despite these positive revenue results, ETSY stock experienced a dip in after-hours trading following the announcement.
Source: Silicon Republic – Etsy to cut 12pc of workforce in search of ‘flatter, faster teams’