American e-commerce site and craft marketplace Etsy (ETSY) plans to lay off 11% of its staff as part of a new cost-saving restructuring. BTIG Director Marvin Fong calls this a right-sizing move to offset the rapid hiring Etsy employed during the COVID-19 pandemic.

"So they had a lot of growth, but all of that was... concentrated in 2020 and 2021, and 2022 and 2023 have really been... digestion years," Fong says to Yahoo Finance on Etsy's growth. "They pulled forward so much demand that they have been finding it hard. And the other thing, I think, is that Etsy is your classic, very discretionary purchase. They're not selling things like Amazon."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

This post was written by Luke Carberry Mogan.

Video Transcript

[AUDIO LOGO] JOSH LIPTON: E-commerce giant Etsy announcing it's laying off 11% of its staff.

The cuts coming as CEO Josh Silverman says expenses are going up, but the company's sellers are not bringing in more sales.

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Etsy trying to stay agile as they restructure and focus on key growth areas.

For more on the state of Etsy, we're going to turn to BTIG Director Marvin Fong.

Marvin, it's great to see you.

So the news here is a restructuring.

They're going to eliminate 11%, it's about 225 employees.

Just get your take, Marvin, on this news and also, as an analyst who covers the name, were you surprised by it, Marvin?

MARVIN FONG: Not too surprised.

I think-- thanks for having me on, by the way.

But I think if you look at-- first of all, we've been hearing about layoffs from other tech companies, Spotify comes to mind.

But even if you go back to this time last year, you know, we were actually at the peak of tech layoffs.

You look at December and January of 2022, that was record numbers of tech layoffs.

And actually, Etsy was actually still onboarding some headcount, because, at that time, they were saying, we grew so much during COVID.

We're just trying to catch up on a hiring.

As 2023 has evolved, it has been a challenging year for Etsy.

And now they're kind of realizing, you know, with growth kind of challenged, we do have to right size the workforce.

So they're kind of actually lagging a bit kind of the trends.

So they weren't laying off this time last year.

And now was kind of the time to right size the workforce.

So I don't really see it as anything alarming per se.

It's always good to be more agile, be more efficient.

And this will allow them to sort of reprioritize and kind of run the business with a little quicker time to market.