Etsy loses 7% amid planned staff cuts

Shares of Etsy (ETSY.US) are losing nearly 7% in today's session due to planned layoffs of about 11% of all employees (225 workers). The company adds that it is currently in a very demanding business environment and must contend with strong competition from companies like Shein and Temu.

Moreover, the company has updated its earnings forecasts for the fourth quarter. The adjusted EBITDA margin is now expected to be between 27% and 28% (previously, this range was between 26% and 27%).

"We operate in a very difficult macroeconomic and competitive environment, and [gross merchandise sales] remain essentially at the same level as in 2021," the letter reads. "This means that we are not increasing our sellers' sales, which is the most important thing we can do for them. At the same time, employee expenses have increased, even though we have introduced significant cost reduction measures and adjusted or suspended hiring plans. This ultimately is not a sustainable trajectory, and we need to change it," added the company's CEO.

Source: xSation5