Key Takeaways:
- Etsy will cut approximately 220 jobs, 12% of its workforce, concentrated in Product and Engineering.
- The cuts came alongside second quarter revenue of $668.3 million, up 9.3% year over year for the Etsy marketplace.
- Etsy said the restructuring was not driven by artificial intelligence.
Etsy announced a restructuring plan on Wednesday afternoon that will eliminate approximately 220 jobs, 12% of the company’s workforce, with most of the cuts concentrated in Product and Engineering. The restructuring, approved by the Audit Committee of Etsy’s board on August 3, will bring headcount down to approximately 1,600 people.
Why Etsy Is Restructuring Its Workforce
In the shareholder letter, Chief Executive Officer Kruti Patel Goyal wrote that the move is “not a cost cutting move” and is instead meant to “move faster and execute with even greater focus” during a period of strong momentum. In a separate memo to employees, she said cost savings are a consequence of the restructuring rather than its objective.
Patel Goyal said Etsy’s near-term priority over the past year had been restoring marketplace growth, and that the reorganization is meant to build flatter, faster teams with fewer silos as the company heads into 2027 planning. Etsy estimates it will incur approximately $35 million in charges, mostly severance and related cash costs, with the process substantially complete by the end of the third quarter.
Departing employees will receive at least 16 weeks of severance pay, with additional pay based on tenure, continued healthcare support for up to twelve months or a cash stipend in non-U.S. markets, a cash payment tied to 2026 incentive compensation and near-term equity vesting, payout of accrued and unused PTO and immigration support.
Etsy Q2 Financial Highlights
- Revenue was $668.3 million, up 9.3% year over year for the Etsy marketplace and 6.2% on a continuing operations basis, topping the $649.1 million analyst consensus reported by CNBC.
- Gross margin was 72.4%, down from 73.2% a year earlier.
- Net income from continuing operations was $114.3 million, more than double the $45.6 million reported a year ago.
- On a GAAP consolidated basis, which includes a loss from discontinued operations tied to the completed sale of Depop to eBay, Etsy reported a net loss of $46.65 million versus net income of $28.84 million a year ago.
- Etsy marketplace gross merchandise sales (GMS) rose 7.5% year over year to $2.6 billion, or 7.2% on a currency neutral basis, a third straight quarter of marketplace GMS growth.
- Active buyers reached 87 million on a trailing twelve-month basis, roughly flat year over year but up approximately 350,000 sequentially. Active sellers grew 5.9% year over year to 5.7 million, a second straight quarter of seller growth.
- Take rate, the share of GMS Etsy keeps as revenue through fees and advertising, was 25.9%, up 130 basis points year over year, including an approximate 80 basis point boost from last year’s Reverb divestiture.
- Marketplace revenue was $456.1 million, up 4.8% year over year on a continuing operations basis and 8.4% for the Etsy marketplace alone. Services revenue was $212.2 million, up 9.3% and 11.2% respectively.
- GMS per active buyer rose 2.8% year over year to $124.
Full-Year Forecast Raised
For the third quarter, Etsy forecast Etsy marketplace GMS between $2.53 billion and $2.58 billion, representing 4% to 6% year over year growth, with take rate of approximately 26%. For the full year, Etsy raised its GMS forecast to mid-single-digit growth, up from its prior low-single-digit outlook, with take rate expected to be roughly in line with the first half.
