Etsy is reducing its workforce by approximately 12%, affecting about 220 employees, primarily in its product and engineering departments. This decision is part of CEO Kruti Goyal's strategy to adapt the online marketplace to evolving online shopping behaviors and customer expectations.

Goyal stated that the layoffs are not a result of cost-cutting measures or the integration of artificial intelligence. Instead, the company aims to operate with leaner, more agile teams and reallocate resources towards more complex development projects. This restructuring is intended to help Etsy keep pace with how buyers discover products and how sellers utilize available tools.

The announcement coincided with a quarterly report that indicated business growth across Etsy. The company's focus is on enhancing its marketplace by understanding and responding to the dynamic ways consumers are interacting with online retail.