U.S.-based general goods marketplace app OfferUp has announced a restructuring that will lead to a more than 20% reduction in staff and unspecified changes to its leadership team.
In scale, the cuts would be “slightly more” than the 22% reduction made in December 2024, OfferUp chief business officer Nathan Garnett told the AIM Group. They will impact multiple roles, including engineering staff. Garnett said, however, that generative AI was not to blame, adding the company’s thinking on AI is to train staff how to use it.
Garnett declined to say which leaders will lose their jobs, but noted that CEO Todd Dunlap would remain, along with chief growth officer Ian Fliflet and Garnett himself. The latter two will both have expanded roles.
The company is making the cuts as it narrows its focus to local transactions, including c-to-c and b-to-c, and ends shipping, which it had already deemphasized due to its high costs.
Shipping was a “low-margin” business for OfferUp, and the company had researched it well enough to understand that few users came to the marketplace because of it. Garnett said the company was confident the change wouldn’t lead to a significant loss of users.
“This is a conversation we’ve had many times over the years,” he said. “It felt like the right time to make that move.”
Dunlap sent a letter to employees this week explaining the changes: “We are resetting the company to be more focused on reaching and serving the local communities that rely on OfferUp and that helped make OfferUp what it is today,”
Along with dropping shipping, other key changes include:
- Exploring ways to update the OfferUp app.
- Bolstering the company’s marketing team and a planned increase in marketing spending.
- Consolidation of teams focused on OfferUp’s b-to-c verticals that cater to auto dealers, small retailers, service providers, recruiters and landlords/apartment managers.
The staffing cuts were called for as the company pares down services and strives for a profit. OfferUp, founded in 2011, has had just one profitable year, 2023, and last year, it fell just short of profitability. During both 2023 and 2024, OfferUp had revenue between $100 million and $150 million.
OfferUp attributed last year’s miss on profits to a drop in programmatic ad rates, which impacted revenue from ads mixed in with search results.
Ad revenue has improved in recent months but was a break-even business on average, Garnett said. “We were slightly profitable before the restructuring, and we’ll be very profitable after,” he added. “We need to significantly increase our user base to achieve our long term goals.”
The headcount cuts are meant to boost cash flow so OfferUp has more money to market the app to consumers.
Garnett said OfferUp’s users appreciate the app, but there’s a challenge in “keeping OfferUp top of mind” so that they use it continually. The company hopes marketing will achieve that.
OfferUp has promised laid-off employees at least ten weeks of severance pay, a continuation of health benefits until the end of the year and outplacement services for those seeking a new job. It will let terminated employees keep their OfferUp laptops.
After last December’s layoffs, OfferUp’s headcount dropped below 300. By February this year, it had been fallen to between 200 and 250.
Since Dunlap took over as CEO in 2021, he has made a few changes in an effort to make a profit, including the development of verticals. But with teams focused on b-to-c being cut back, that strategy has apparently not been the growth driver OfferUp had hoped.
“Local businesses can be an important part of our platform, but we must be thoughtful about the balance between business offerings and the core user-to-user interactions,” Dunlap said in his note to employees.
