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Ecommerce platform Shopify lays off 1,000 employees

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Ecommerce Platform Shopify announced on Tuesday to cut 10 percent of its workforce – about 1,000 Staff members across verticals – because it couldn’t predict that the e-commerce industry would continue to grow at the same rate after the pandemic as it did over the two-year period.



The CEO of the company Tobi Lutke said in a statement that Shopify has to go through a headcount reduction, which will see about 10 percent leave by the end of the day.

“Most of the roles involved are in recruiting, support and sales, and across the company we are also eliminating over-specialized and duplicate roles, as well as some groups that were handy to have but were too far from building products,” he informed. .

The company has sent emails to those affected and they will “meet with a leader on their team”.

Lutke said that before the pandemic, e-commerce growth was stable and predictable.

“Was this increase a temporary effect or a new normal? And so, given what we saw, we placed another bet: We bet that the channel mix — the proportion of dollars traveling through e-commerce rather than physical retail — would rise permanently. 5 or even 10 years ahead,” he said.

Shopify’s workforce has increased from 1,900 in 2016 to approximately 10,000 in 2021 to meet projected growth.

However, Lutke said it is now clear that the bet did not pay off.

“What we’re seeing now is the mix getting back to about where pre-Covid data would have suggested it should be at this point. It’s still growing steadily, but it wasn’t a significant five-year jump,” he explained. .

Those affected by the layoff will receive 16 weeks of severance pay, plus an extra week for each year of employment with Shopify.

“We will remove every equity cliff and expand all medical benefits. Knowing that Shopify is just a stopover on a career journey, we also want to help everyone succeed in taking their next steps,” the CEO said, adding that it company will offer outplacement services with access to career coaching, interview support, resume creation, etc.

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