Etsy to Cut 12% of Workforce, Announces $2 Billion Stock Buyback

Etsy Inc. announced a significant restructuring plan on Wednesday that includes laying off approximately 220 employees, or 12% of its workforce, and authorizing a new $2 billion stock repurchase program.

The moves were detailed in a U.S. Securities and Exchange Commission (SEC) filing and an email to employees from Chief Executive Kruti Patel Goyal.

Restructuring Details

The layoffs will primarily affect employees in Etsy's product and engineering departments, according to the company. In her email, CEO Kruti Patel Goyal stated the goal is to "improve coordination and speed of decision-making."

Etsy said that affected workers will receive a minimum of 16 weeks of severance pay, with additional compensation based on tenure. The company will also provide continued healthcare support for up to 12 months and other benefits.

Strategic Rationale

Ad

Patel Goyal emphasized that the restructuring was not primarily a cost-cutting measure. "Cost savings are a consequence of these changes, but they are not the objective," she wrote. She also noted that the company will "continue to see us invest in the business and the team and hire in areas that are important to our long-term strategy."

The CEO also clarified that the job cuts were not "driven by AI," but acknowledged that artificial intelligence is changing how the company operates. "As the tools available to us evolve, the skills we need, the ways we work together, and the capabilities we build across Etsy must evolve as well," Patel Goyal said.

Shareholder Returns and Context

Concurrent with the layoffs, Etsy's audit committee approved a new stock repurchase program. The plan authorizes the company to buy back up to an additional $2 billion of its common stock. Share buybacks can support a company's stock price and increase earnings per share by reducing the number of outstanding shares.

The dual announcements of a workforce reduction and a large-scale share repurchase program came on the same day Etsy was scheduled to report its financial results after the market close, providing investors with a comprehensive update on the company's operational and capital allocation strategies.