The Wall Street Journal reports that Shopify is laying off about 1,000 employees, representing about a tenth of its global workforce.
According to the story, "Tobi Lütke, 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."
In his memo, Lütke took responsibility for making a bet - that e-commerce sales would continue to grow apace even as the pandemic receded - that didn't pay off. "Ultimately, placing this bet was my call to make and I got this wrong," he wrote.
The Journal reports that "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. Lütke. 'We’re also eliminating overspecialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products,' he wrote."
- KC's View:
It is a dramatic move by Shopify, but to be clear, these are the first major layoffs at the company since it was founded in 2006 … considering how many swings we've been through since then, that's reasonably impressive. The Shopify bet during the pandemic also was reasonable, and I suspect that over the long run, a lot of those jobs will come back. Maybe more.