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OfferUp CEO Todd Dunlap. (OfferUp Photo)
OfferUp, the Seattle-area company behind a popular used goods marketplace, is cutting 22% of its headcount in a bid to remain profitable as it looks to expand into new product lines.
In a memo to staff, which you can read in full below, OfferUp CEO Todd Dunlap cited macroeconomic trends such as programmatic ad rates that affected some of the company’s revenue lines.
“While we still have plenty of cash on our balance sheet, it’s important in these times to remain profitable,” he wrote.
The company did not disclose the number of employees affected by the layoffs. OfferUp has nearly 500 employees, according to LinkedIn.
Affected employees will receive severance and health benefits through the end of February. The company is providing career transition and job placement services.
Founded in 2011, OfferUp competes against Craigslist, eBay, Facebook and other marketplaces where users buy and sell goods. The company says it facilitates 30 million transactions on its platform annually and is currently ranked No. 3 on the GeekWire 200, our index of Pacific Northwest startups. It generates revenue in part by charging sellers for premium features and broader reach.
OfferUp has been planting seeds to expand beyond used goods and into “local commerce” areas such as job postings, events, home services, and more.
“To be clear, finding great deals on goods and autos in your local community will remain the core of OfferUp,” Dunlap wrote in the memo. “But we have clear signal that the simple, trusted, and safe approach that has made us successful in goods and autos can be extended into additional local offerings, and that those extensions will create a better experience and better value for our users.”
Layoffs hit the tech industry hard during 2022 and 2023 amid higher interest rates and more cautious spending. More than 260,000 tech employees were laid off last year, and nearly 150,000 were cut this year so far, according to Layoffs.fyi.
Dunlap, a former exec at Xbox and Booking.com, took over for OfferUp founder and former CEO Nick Huzar in 2021. Huzar is now leading a secretive new EV charging startup, Juicer Energy.
Read Dunlap’s memo to staff below.
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OfferUp Team,
I’m reaching out today with some difficult news. After careful consideration, we have made the decision to reorganize our team to better align with our goals and strategy for 2025 and beyond. Unfortunately, as part of that reorganization, we will be reducing the size of our team. OfferUp managers and our People team just finished meeting with our colleagues who will be leaving, so I wanted to touch base with the rest of you to provide some context for the changes.
First and foremost, I want to thank our departing colleagues. Many of them are strong contributors who made a big impact on OfferUp and its users. In most cases, they were in roles that we determined weren’t necessary for our future plans, and while I wish our growth was sufficient to create new roles for them, that is not currently the case. We know they will have a similarly positive impact in their next roles and wish them the best.
It is important that we treat those leaving fairly and in accordance with our values. We are providing our departing colleagues with the following:
Severance – The holidays are a difficult time for this transition, so we will be providing severance in an amount equivalent to their salary through the end of February. They will also be receiving the same holiday bonus as our remaining employees.
Healthcare – We will cover the full cost of COBRA coverage through February 2025.
Outplacement Services – Our departing colleagues will have access to career services through a company that provides career transition and job placement services.
Laptops – We are allowing everyone to keep their OfferUp-issued computers at no cost.
For most of those impacted, today is their last day at OfferUp. A few selected employees have agreed to stay on to help transition over the next few months. In all cases, I personally appreciate the dedication and professionalism demonstrated by our departing colleagues, and I ask you all to join me in thanking them.
With respect to the reorganization and strategy, we’ll discuss the specifics in more detail in the all-team meeting tomorrow. I don’t want to go into too much detail today because today is a day of adjustment, and I want to provide you all with a bit of time before we start focusing on the future.
That said, I will provide some high-level insight into the go-forward plan so that you’re not left wondering.
We’ve talked over the last several months about our ongoing transition from a C2C local items marketplace to a comprehensive mobile platform for classifieds and local connection. We’ve tested a few steps into this evolved concept for OfferUp, and the results are very encouraging. To be clear, finding great deals on goods and autos in your local community will remain the core of OfferUp. But we have clear signal that the simple, trusted, and safe approach that has made us successful in goods and autos can be extended into additional local offerings, and that those extensions will create a better experience and better value for our users.
With the launch of Jobs, Services, Real Estate Rentals, Local Events, Community, and the other local connections experiences, we’re showing there is demand for the OfferUp approach to “local” in many areas. I’ve also been blown away by the response of local merchants to the OfferUp Business offering that we added last year. The numerous positive testimonials from our local merchant customers about the success they see on OfferUp demonstrates the huge impact we can have on the people and organizations that help our communities thrive.
I really want to lean in on these opportunities to evolve OfferUp. To do so, we need to ensure (1) that we will have sufficient resources for the investment, and (2) that we can do so responsibly and profitably. While 2023 was a great year for OfferUp and we saw revenue growth and our first year of EBITDA profitability, in 2024, the macroeconomic impact on some of our legacy revenue lines, particularly the impact of programmatic ad rates, has caused us to slip slightly back into the red. While we still have plenty of cash on our balance sheet, it’s important in these times to remain profitable. It’s also important to invest in spreading our story to more users, and I want to put more resources toward user growth and brand awareness. However, I want to invest prudently and profitably, and the restructured organization will allow us to do so.
In short, we want to provide more reasons for our users to come back to OfferUp more often, we want to be a force that strengthens and connects our local communities, and we want to invest in making sure more users know how OfferUp can help them in their everyday lives.
I look forward to sharing more with you tomorrow about how our new structure will allow us to achieve those goals.
Todd
