Updated · Nov 16, 2022
Shopify to Lay Off 10% of Workers
Updated · Jul 27, 2022
The Canadian e-commerce company’s CEO, Tobi Lutke, made the announcement on Tuesday, leading to its shares plummeting.
About 1000 Workers Cut
Shopify will lay off approximately 10% of its global workforce as the explosive growth it experienced at the peak of the pandemic slows. Following the announcement, the company’s shares fell by 14%.
CEO Tobi Lutke disclosed this on Tuesday in a memo to staff.
“Shopify has to go through a reduction in workforce that will see about 10% leave by the end of the day,” he wrote. “Most of the impacted roles are in recruiting, support, and sales, and across the company. We’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products.”
Lutke admitted taking a wrong bet on how long the pandemic-fueled boom would last and expressed his regrets about the cuts.
The e-commerce platform had about 10,000 employees, according to regulatory filings at the end of 2021. That figure is about twice the amount before the pandemic, indicating rapid expansion as earnings skyrocketed.
However, as the pandemic waned and brick-and-mortar shops reopened, Shopify and other e-commerce platforms began to feel the pinch.
The company erroneously predicted that online spending would “permanently leap ahead by 5 or even 10 years”.
The laid-off staff will each receive sixteen weeks of severance pay, plus an additional week for every year of tenure.
Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.
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