Shopify Cutting 10% of Global Workforce

Canadian eCommerce company Shopify is slashing 10% of its global workforce or roughly 1,000 people, The Wall Street Journal reported on Tuesday (July 26) citing an internal memo seen by the publication.

Shopify Founder and CEO Tobi Lütke told staff in the memo that the company’s growth has slowed as consumers return to in-store shopping post-pandemic and rein in online habits. 

Laid-off workers are being offered 16 weeks of severance plus one week for every year of service, according to the WSJ.

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Lütke said in the letter to employees that he had expected that the increase in eCommerce sales would continue long beyond the pandemic but “… I got this wrong,” Lütke said.

Headquartered in Ottawa, Shopify is planning to cut all jobs in every division with most happening in recruiting, support and sales units, the WSJ reported.

“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,” Lütke said in the memo, the WSJ reported. 

Read more: Shopify Partners With Airwallex to Drive Global Payments

Shares of the company fell 15% Tuesday after the layoffs were reported, and have fallen 80% since last November’s peak.

The announcement is Lütke’s most major move after Shopify’s shareholders approved a board plan to protect his voting power, according to the WSJ. 

“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,” Lütke said in the memo, per the WSJ.

Shopify boosted its workforce from 1,900 in 2016 to roughly 10,000 in 2021 to keep up with increased business, the WSJ reported.

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Shopify reported annual revenue growth of 86% in 2020 and 57% in 2021 to about $4.6 billion but the company is forecasting that this year’s numbers wouldn’t meet the pandemic’s boosted increased revenues.