Shopify To Lay Off 10% of Workers in Broad Shake-Up

Shopify is cutting roughly 1,000 workers, or 10% of its global workforce, rolling back a bet on e-commerce growth the technology company made during the pandemic, according to an internal memo. From a report: Tobi Lutke, the company's founder and chief executive, told staff in a memo sent Tuesday that the layoffs are necessary as consumers resume old shopping habits and pull back on the online orders that fueled the company's recent growth. Shopify, which helps businesses set up e-commerce websites, has warned that it expects revenue growth to slow this year, and its shares have tumbled nearly 80% since they peaked in November. It reports quarterly results on Wednesday. Mr. Lutke said he had expected that surging e-commerce sales growth would last past the Covid-19 pandemic's ebb. "It's now clear that bet didn't pay off," said Mr. Lutke in the letter, which was reviewed by The Wall Street Journal. "Ultimately, placing this bet was my call to make and I got this wrong." The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lutke. "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," he wrote. Staff who are being let go will be notified on Tuesday.

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[NoWayNoShapeNoForm]

the developers aren't really affected

A 'business" with developers and no business sounds like a Silicon Valley start-up failure.

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[Opportunist]

They axed management?

My financial protip

[Applehu Akbar]

A lot of businesses are still hiring, but right now you don't want to interview with any company that ends in -ify or -ly.

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[dskoll]

Yes, such companies are really iffy.

I screwed up, you pay

[smooth wombat]

That's what Lutke is saying. He guessed wrong and rather than take the hit by having his salary and perks cut, he'll lay off hundres of people who did nothing other than believe is bullshit.

And that, kids, is how capitalism works.

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[Pascoea]

Well, at least he's owning up to his mistakes. Too many people at his level just blame it on "market conditions" or "unforeseeable circumstances" then ride off in their private jet. An, unfortunately, you're right. It's a good example of peak capitalism.

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[timeOday]

Why do people say this in response to every cutback now? When business slumps, it takes fewer employees. This would still be true even if the CEO had a perfect crystal ball, although obviously they don't. So, OK, that is how capitalism works. But what did you want? It's the only thing to do.

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[smooth wombat]

Real leaders lead by example. Owning up to a mistake is one thing. Keeping everything you have is another.

If he has to hack off 10% of his workforce to make up for his mistake then he should also get some pain. A large reduction in salary, cutting of any perks, no stock options, etc. He should not come out unscathed.

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[timeOday]

If he has to hack off 10% of his workforce to make up for his mistake then he should also get some pain.

Well, sort of. The mistake was hiring them in the first place, since the business does not have valuable work for them to do.

I agree his pay should be lower if the company underperforms the market, or he should be fired if the board thinks they can get somebody better than him for less pay. I would not assume otherwise just because the article doesn't mention it (it hasn't even happened yet, even if

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[Sleeping Kirby]

It's not though. There's budgetary shifts, salary shifts, reducing production, increasing prices, absorbing reduced profits and any combinations in between. And I'm not even business major. The dumb/simple answer is cutting employees. The "that's how it works" response is just a way for people who don't want bad things to change to excuse themselves. That's only how it works if you're more worried about immediate profits and pleasing share holders than anything else. And, even at it's core, that's less capi

My personal opinion

[CarlStromes]

"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"- I can already see how they receive a letter with these words

decent severance

[BishopBerkeley]

At least they provided employees with 16 weeks severance, including extension of medical benefits for that period. I wish I could get that package right now!

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[CastrTroy]

Ontario has pretty strong rights for severance pay. So it's probably easier for them to be generous when the alternative is to be stingy and end up paying the same after ex-employees bring you to court.

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[gmack]

Not that good. If we look at the example here [ontario.ca] Susan worked seven years and gets $5270.00. At $17/hr that's 310 hours of severance or 5 and a half weeks of pay.

More likely, they want to avoid a bad reputation that causes recruitment problems in the future given the current employee shortage/

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[CastrTroy]

That's the minimum as required by the ESA, but under common law you can often get a lot more.

Starcraft

[JThundley]

I don't care how many employees they fire, as long as their Starcraft team stays strong. Let's go Shopify Rebellion! The community loves you for your continued support, Shopify.