Etsy Inc. (NASDAQ: ETSY) saw its shares rise in Wednesday’s session after the company announced that it would be taking a few key initiatives in order to deliver value to shareholders, including layoffs.
The “headcount reductions” will include primarily marketing, product management and general and administrative positions. The majority of eliminated positions will be in the Brooklyn headquarters, but management also will streamline operations in its global offices.
For the actual numerical breakdown, Etsy is reducing its workforce by roughly 140 positions, or approximately 15% of its total current workforce. This is in addition to the headcount reductions announced on May 2, 2017, bringing total eliminated positions to about 230, or an approximate 22% reduction compared to the headcount at the end of 2016.
Management expects to incur employee severance charges and other exit costs of $6.0 million to $8.8 million related to these announcements. Keep in mind that this is in addition to $6.5 million to $8 million of severance charges and other exit costs that are expected to be incurred for the reductions announced in May.
Josh Silverman, Etsy’s CEO, commented:
My conviction that Etsy has a unique opportunity within the ecommerce space has intensified during my initial weeks as CEO. Our vibrant community, strong brand affinity, 45 million listings, and ability to connect people through commerce provide us with a differentiated offering and solid foundation for growth. By focusing on our ‘vital few’ initiatives, we will be a more disciplined company that is better positioned to create the world’s most compelling buying and selling experience.
Shares of Etsy were trading up 1.3% at $14.16 on Wednesday, with a consensus analyst price target of $12.38 and a 52-week range of $8.56 to $16.05. The company has a total addressable market cap of $1.65 billion.