Etsy is the latest company to lay off staff in 2023. CEO Josh Silverman confirmed the marketplace is letting go of 11 percent of its staff (around 225 employees) in its first significant staffing cut in recent years. It’s also reshuffling its leadership, including announcing two executives’ departures at the beginning of 2024.

“After deep discussion and careful consideration, we are reorganizing our internal structure to more closely align our resources with our most important business priorities and better serve our customers,” Silverman wrote to employees. “As part of this, I’m sad to share that we must say goodbye to approximately 225 team members, reducing the Etsy workforce by ~11%. This decision was among the hardest we’ve ever made, and one that we have tried earnestly to avoid.”

The company is facing a consumer spending slowdown, as its leadership warned in its Q3 2023 earnings call in November. “There’s no doubt that this is an incredibly challenging environment for spending on consumer discretionary items,” Silverman said to investors last month. “It’s therefore important to acknowledge that the volatile macro climate is going to make it challenging for us to grow this quarter.” Etsy’s revenue growth had already stalled in recent years, with customers adjusting their spending habits post-lockdowns after a pandemic-era boom.

Etsy

Etsy’s CEO says Shein and Temu have also affected the company’s bottom line. “There’s no question that Temu and Shein are having an impact in the market,” Silverman said in the November call. “You don’t get that big that fast without taking share from many people.”

However, the two upstarts’ competition isn’t the only issue; Shein and Temu have also allegedly driven up Etsy’s advertising costs. “And the other thing that is happening is they’re spending a large amount of money on marketing, not clear that they’re using ROI thresholds to do that,” Silverman added. “And so I think those two players are almost single-handedly having an impact on the cost of advertising, particularly in some paid channels in Google and in Meta.”

Silverman plans to market the platform’s “quality, value and reliability” to help fend off the younger competitors, which specialize in cheaper goods. “I have great confidence in these plans, but we need the right structure and resources in place to successfully execute on them,” he wrote to employees.

The CEO wasn’t above talking a little smack, either. “We are the opposite of Temu,” Silverman said to investors in November. “If I had to think about what is the polar opposite of Etsy, I’d probably get pretty close to Temu.”

As part of the reorganization, Etsy’s chief marketing officer, Ryan Scott, and chief human resources officer, Kim Seymour, will leave the company on January 1. Chief operating officer Raina Moskowitz will now lead marketing teams, and chief product officer Nick Daniel inherits Moskowitz’s previous turf, overseeing payments and fulfillment teams.

OpenAI’s recent drama hasn’t only caught UK regulators’ attention. Bloomberg reported Friday that the Federal Trade Commission (FTC) is looking into Microsoft’s investment in the Sam Altman-led company and whether it violates US antitrust laws. FTC Chair Lina Khan wrote in a New York Times op-ed earlier this year that “the expanding adoption of AI risks further locking in the market dominance of large incumbent technology firms.”

Bloomberg’s report stresses that the FTC inquiry is preliminary, and the agency hasn’t opened a formal investigation. But Khan and company are reportedly “analyzing the situation and assessing what its options are.” One complicating factor for regulation is that OpenAI is a non-profit, and transactions involving non-corporate entities aren’t required by law to be reported.

In addition, Microsoft’s $13 billion investment doesn’t technically give it control over OpenAI in the eyes of the law, another factor in determining what action a governmental agency might be able to take. However, the recent ousting and re-hiring of Altman — and the integral role Microsoft played in reverting those chess pieces to its preferred positions — suggests the lack of control over the nonprofit is more a technicality than the relationship’s underlying essence.

Justin Sullivan via Getty Images

The UK’s Competition and Markets Authority (CMA) wrote earlier today that it’s considering investigating the relationship between AI’s two dominant players. It said it’s weighing “recent developments,” referring obliquely to the Altman-Microsoft drama. “The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity,” the CMA wrote in its news release.

Khan, also challenging Microsoft’s $69 billion Activision Blizzard acquisition, has previously sounded the alarm about the need for AI regulations.

“As these technologies evolve, we are committed to doing our part to uphold America’s longstanding tradition of maintaining the open, fair and competitive markets that have underpinned both breakthrough innovations and our nation’s economic success — without tolerating business models or practices involving the mass exploitation of their users,” the youngest-ever FTC chair wrote in May. “Although these tools are novel, they are not exempt from existing rules, and the F.T.C. will vigorously enforce the laws we are charged with administering, even in this new market.”