Etsy’s new chief executive officer Josh Silverman is working fast to make shareholders happy.
Little more than a month in the role, Silverman, who replaced long-time Etsy executive Chad Dickerson, is moving to cut more staff and “realigning internal resources” in order to get the online marketplace to profitability and get value to shareholders.
Etsy’s first quarter financial results carried on the previous year’s trend of revenue growth mixed with overall losses. The company’s revenue for the quarter hit $96.9 million, an 18.4 percent bump over the same quarter last year, but posted a net loss of $421,000, compared to a net income of $1.19 million a year ago.
Operating expenses for the quarter totaled $64.3 million, a 36.4 percent increase over 2016 that is equal to 66.4 percent of Etsy’s revenue for the quarter.
In order to make Etsy into “a more disciplined company that’s better positioned to create the world’s most compelling buying and selling experience,” Silverman said 15 percent of the company’s workforce is being cut, on top of the 8 percent reduction that was revealed when he first took the helm in early May.
Together, the reductions will see about 230 Etsy staffers laid off. Areas of the company that are most impacted are marketing, product management and administrative positions.
The cuts also come about a month after private equity firms TPG Group Holdings and Dragoneer Investment Group LLC each purchased sizable stakes in Etsy, worth $52.5 million and $45 million, respectively. Both firms said at the time they had reached out to the company to discuss “strategic alternatives.”
Wall Street appeared happy with Silverman’s move, and pushed Etsy’s stock up 2.15 percent to $14.28 in the first minutes of trading.
“We are moving forward with a more nimble structure that supports our current business needs and allows for faster execution so we can better serve creative entrepreneurs around the world,” Silverman said.
He added that Etsy has is also set to “double down on the fewest, highest impact initiatives in our core marketplace while de-prioritizing other projects and streamlining our resources.”
The staff cuts come with a cost however, and Etsy is expecting severance charges of up to $8.8 million related to the most recent layoffs, in addition to the up to $8 million it’s prepared to pay for the layoffs announced in May.
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