Shopify, the Canadian e-commerce provider powering thousands of fashion stores, is to cut 10 percent of its workforce.
Of its 10,000 strong workforce, approximately 1,000 employees are expected to be let go. The roles most affected are customer support, HR recruitment and sales. Shopify’s management team is expected to host a conference call to discuss second-quarter results on Wednesday, where a focus on fast expansion during the pandemic stretched the e-commerce giant.
In a memo to Shopify staff CEO Tobi Lutke said the reduction of staff would be enforced by the end of the day, with severance packages of up to four months being given. Shopify saw demand for its e-commerce services soar early on in the pandemic, with the company responding by intense growth and rapidly expanding to meet market needs. The company did not bank on the demand for physical retail returning to pre-covid levels and slower growth.
Lutke amplified that Shopify still has much opportunity ahead, despite the challenging macro economic times,
Shares fell 16 percent on the day of the announcement, a stark contrast after it was one of the hottest pandemic stocks during the online covid boom.
Analysts earlier this year cut second quarter expectations after Shopify missed Q1 profit expectations.