Canadian tech giant Shopify Inc. will layoff 10 per cent of its workforce Tuesday because the company misjudged the growth of e-commerce.
The Ottawa e-commerce companyB次元官网网址檚 chief executive Tobi L眉tke said in a blog post that most of the staff impacted by the cut work in recruiting, support and sales.
Shopify will also eliminate B次元官网网址渙verspecialized and duplicateB次元官网网址� roles as well as groups that L眉tke said were B次元官网网址渃onvenient to have but too far removed from building products.B次元官网网址�
The company is carrying out the cuts because the COVID-19 pandemic created a surge in demand for ShopifyB次元官网网址檚 software as consumers shifted to making a higher number of purchases online, L眉tke said.
Shopify bet the amount of shopping people did online instead of at brick-and-mortar retailers would leap ahead by five or 10 years from pre-pandemic predictions.
B次元官网网址淲e couldnB次元官网网址檛 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,B次元官网网址� L眉tke said.
B次元官网网址淚tB次元官网网址檚 now clear that bet didnB次元官网网址檛 pay off.B次元官网网址�
Shopify has recently seen people are reverting to pre-pandemic shopping habits. While e-commerce is still growing steady, L眉tke said it doesnB次元官网网址檛 amount to a five-year leap ahead, forcing Shopify to make cuts.
B次元官网网址淯ltimately, placing this bet was my call to make and I got this wrong. Now, we have to adjust,B次元官网网址� said L眉tke.
B次元官网网址淎s a consequence, we have to say goodbye to some of you today and IB次元官网网址檓 deeply sorry for that.B次元官网网址�
Shopify is not alone in laying off workers. Over the last few months, Wealthsimple, Klarna, Twitter and Netflix have all shed staff as investor exuberance around tech stocks has faded, inflation has soared to an almost 40-year high and recession rumours have loomed.
Data aggregator Layoffs.fyi has counted 401 startups that have laid off a collective 57,552 employees so far this year.
Amid a broad market sell-off that has particularly weighed on the tech sector, the price of ShopifyB次元官网网址檚 stock has sunk more than 70 per cent since its late 2021 peak of $2,228.73. It sat at $40.40 in mid-morning trading Tuesday.
Those affected by TuesdayB次元官网网址檚 layoff will get 16 weeks of severance pay, plus an additional week for every year of tenure at Shopify. The company will also remove any equity cliff B次元官网网址� a minimum amount of period workers have to stay at a company before they can start receiving equity.
Laid off workers will get access to career coaching, interviewing support, resume crafting services and Shopify will cover some of their internet costs during the severance period.
Workers will also be able to keep their home office furniture the company gave them a stipend for earlier in the pandemic and will give a B次元官网网址渒ick-start allowanceB次元官网网址� that can be used to buy new laptops.
Companies in this story: (TSX:SHOP)
Tara Deschamps, The Canadian Press
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