An employee works at Shopify’s headquarters in Ottawa, Ontario, Canada.
Chris Wattie | Reuters
Shopify is laying off about 1,000 workers, or about 10% of the global workforce, the company announced Tuesday.
Shopify’s stock closed down 14%.
In a memo to employees, CEO Tobi Lutke admitted that he misjudged the timing of the e-commerce boom caused by the pandemic, and amid declining online spending, Shopify will cut a role number.
Shopify has over 10,000 employees as of December 31, 2021, according to a stock record.
The cuts will affect all parts of Shopify, though most will happen in hiring, support, and sales, and “company-wide” it is eliminating “over-the-counter roles.” expertise and duplication, as well as a number of groups that are convenient to have but too far away, Lutke said in the memo.
Technology company was notified of dismissalhiring freezes and job offers canceled amid economic uncertainty and Covid pandemic decreasing trend. Earlier this month, Google’s parent company Alphabet and Facebook owner Meta both say they will slow down hiring. Companies include Netflix and Coinbase announced dismissal.
The Canadian company, which makes tools for companies to sell products online, is one of the biggest beneficiaries of the e-commerce boom caused by the pandemic. As stores reopen and consumers return to pre-pandemic shopping habits, Shopify and other players in the e-commerce space are beginning to face concerns that they won’t be able to sustain themselves. maintain growth as high as they enjoy.
Shopify bets that the growing mix of online spending versus in-store commerce will “jump forever 5 or even 10 years,” Lutke said. The company added staffing to accommodate what it anticipates is a continued shift to e-commerce, more than doubling headcount since the end of 2019, the company said. in february.
“It is now clear that the bet has failed,” said Lutke. “What we’re seeing now is the combination is coming back roughly where the pre-Covid data suggests it should be at this point. Still growing steadily, but it’s not a huge leap forward. meaningful in the next five years.”
In its most recent earnings report, Shopify forecast that revenue growth will be lower in the first half of the year, as it adjusts for tough comparisons during the pandemic. The company is expected to report second-quarter earnings on Wednesday.
Shopify says laid-off employees will receive 16 weeks of severance pay, plus one week for each year of employment at the company.
