E-commerce site Etsy has laid off about 225 workers as part of a restructuring and cost reduction program as it faces economic challenges.

The company said it reduced its workforce by 11 per cent as employee expenses have increased while gross merchandise sales (GMS) stood flat.

“We are operating in a very challenging macro and competitive environment, and GMS has remained essentially flat since 2021,” said Etsy CEO Josh Silverman.

“At the same time, employee expenses have grown, even as we have introduced significant cost-cutting measures and adjusted or paused hiring plans. This is ultimately not a sustainable trajectory and we must change it.”

The CEO explained that Etsy – which has nearly 7 million sellers worldwide – needs the right structure and resources to implement its plans for recovery during the 2024 financial year.

Meanwhile, Etsy said that Ryan Scott will leave the company as chief marketing officer. Current COO Raina Moskowitz will take Scott’s role as well.

In addition, Kim Seymour will step down as chief human resources officer and will be succeeded by current VP of global people and talent strategy Toni Thompson.

The departing admin staff will remain on Etsy’s payroll until January 2 next year and will receive a severance package, which includes 16 weeks of base pay plus 1 week for each full year of service, and bonus payments for this year.