Online marketplace Etsy’s shares dropped more than 14 per cent in after-hours trading on Tuesday after the company announced the departure of its chief executive and chairman, a round of announced job cuts, as well as earnings that undershot analysts’ expectations.
The company, known for the plethora of artisan and handcrafted items offered on its e-commerce platform, said on Tuesday that current chief executive and chairman Chad Dickerseon, who has served in that role since 2011, would be stepping down immediately, although he will continue to serve in an advisory role through May 31. His replacement will be Josh Silverman, who has been on Etsy’s board since November and is a former chief executive of video-chat company Skype.
Fred Wilson, who has been on Etsy’s board since 2007, will step into Mr Dickerson’s role as chair of the board. The outgoing CEO said in a statement that the board had decided it was time for new leadership and that he supported the decision. Mr Wilson said:
Etsy is very fortunate to have Josh stepping into the CEO role at this time. He brings twenty years of senior leadership in technology and marketplace businesses to Etsy. In the six months that Josh has been on our Board, we have gotten to know him well and he has gotten to know us well. That will make for an easier transition and faster execution.
Etsy’s chief technology officer, John Allspaw, will also be leaving the company. His replacement on an interim basis will be Mike Brittain, currently the vice president of engineering.
The news comes amid a rocky round of quarterly results that saw the company swing to an unexpected loss. Revenue came in at $96.9m for the three-month period ending March 31, versus estimates for $98.35m. Its net loss was $400,000, compared to the $500,000 profit that analysts surveyed by Bloomberg had expected. And on an earnings per share basis, the company broke even.
In light of the leadership shift, the company said it will review its current annual guidance and issue a new outlook when its second-quarter results are announced. And, in order to streamline costs, it said it expects to eliminate 80 positions this year, accounting for approximately 8 per cent of its total workforce.