Shopify Announces 10% of Company’s Workforce To Be Fired Immediately
The Canadian multinational e-commerce company headquartered in Ottawa is laying off roughly 1,000 workers, or around 10% of its global workforce, the company announced Tuesday.
Shares of Shopify closed down 14%.
In a memo to staff, CEO Tobi Lutke acknowledged he had misjudged how long the pandemic-driven e-commerce boom would last, and amid a broader pullback in online spending, Shopify would move to cut a number of roles.
Building companies comes with high highs and low lows. Today I had to share some sad news with Shopify. https://t.co/gNO37lWYpg
— tobi lutke (@tobi) July 26, 2022
Shopify had more than 10,000 employees as Dec. 31, 2021, according to a securities filing.
The cuts will affect all of Shopify’s divisions, though most will occur in recruiting, support and sales, and “across the company” it is eliminating “over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products,” Lutke said in the memo.
I just got laid off from @Shopify in an email. And they took my slack access away immediately. I dropping my kid off so I don’t even know if I’ll have access to my computer.
— Tepid girl summer (@_aishahfg) July 26, 2022
Just in: Shopify laying off ~10% of staff. Emails are going out to people impacted right now. Recruiting, sales, support the most impacted.
The company has frozen hiring a few weeks ago. Most people I’m talking with are surprised.
— Gergely Orosz (@GergelyOrosz) July 26, 2022
Shopify bet that the increasing mix of online spending over commerce in stores would “permanently leap ahead by 5 or even 10 years,” Lutke said. It staffed up to meet what it anticipated would be a sustained shift to e-commerce, more than doubling its employee base since the end of 2019.
“It’s now clear that bet didn’t pay off,” Lutke said. “What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point. Still growing steadily, but it wasn’t a meaningful 5-year leap ahead.”
*SHOPIFY CONFIRMS 10% REDUCTION IN STAFF TO LEAVE BY END OF DAYhttps://t.co/8gR4poO745
— zerohedge (@zerohedge) July 26, 2022
Shopify was founded in 2006.