Shopify cuts staff by 10%
Canadian ecommerce company Shopify has announced a 10% cut in its workforce following a decline in demand for online shopping post-pandemic.
The decision will impact approximately 1000 employees, with roles affected across recruiting, support and sales. The company attributes some of the job losses to roles that were over-specialised or duplicate and groups that were "convenient to have but too far removed from building products".
In a statement to Shopify's employees, Founder and CEO Tobias Lütke said the company predicted the surge in online shopping caused by the pandemic to continue, but that "bet didn't pay off".
Lütke added: "We bet that the channel mix - the share of dollars that travel through ecommerce rather than physical retail - would permanently leap ahead by five or even ten years. We couldn’t know for sure at the time, but we knew that if there was a chance that this was true, we would have to expand the company to match.
"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 five-year leap ahead. Ultimately, placing this bet was my call to make and I got this wrong. Now, we have to adjust. As a consequence, we have to say goodbye to some of you today and I’m deeply sorry for that."
When the pandemic began, the demand for Shopify's services "rocketed" as retail moved online. To help its merchants, Shopify said it threw away its roadmaps to address to the crisis.
Commenting on this, Lütke said: "It was hard, but we know for a fact that more merchants’ businesses survived the pandemic because of the work we did in this time and that’s exactly what our mission is about."
