Etsy shares took a hit Wednesday after the online marketplace announced a restructuring plan that includes laying off 11% of its workforce.

The stock remained down more than 5% in the afternoon after the company announced in an SEC filing Tuesday that the board had approved the plan aimed at streamlining operations and cutting costs. 

The layoffs will slash Etsy's headcount by roughly 225 workers, cutting its workforce down to 1,770 people, which the company said is roughly the same level of employees it had in early 2022.

Etsy CEO Josh Silverman told employees in a letter Wednesday that "[w]hile the Etsy marketplace is still more than double the size it was in 2019, we need to acknowledge and adjust for today’s realities."

"We are operating in a very challenging macro and competitive environment, and [gross merchandise sales] has remained essentially flat since 2021," Silverman wrote. "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."

Silverman acknowledged the timing of the job cuts, which come less than two weeks before Christmas, is "unfortunate."

"Once we knew we needed to make workforce reductions, we wanted to communicate our decision with you as soon as possible," the CEO wrote. "However, that puts us in the unfortunate position of sharing this news amid the winter holidays."

GET FOX BUSINESS ON THE GO BY CLICKING HERE

The departing employees will receive a minimum of 16 weeks' pay, 12 months of COBRA health care coverage, and three months of career service support.

In addition to the staff layoffs, Etsy said Chief Marketing Officer Ryan Scott will step down effective Dec. 31 but will stay on as an adviser until as late as the end of June. Scott will be replaced by COO Raina Moskowitz, who will assume the new title of chief operating and marketing officer.