Shopify, the e-commerce company based out of Canada, has announced that it will lay off 10 per cent of its workforce. That means, about 1000 people in the company, globally. Media reports say thatTobi Lütke, founder and chief executive, Shopify, mentioned the intention to lay off a part of the workforce in an internal memo sent to the employees.
Lütke mentions in his memo that he expected the e-commerce industry to grow at the same pace as it grew during the pandemic and had bet on it. However, it was a miscalculation from his end which led the Company to take such a call.
After registering a 110 per cent growth in revenues during the first quarter of 2021, the Company ended the year with a 41 per cent growth by the last quarter of 2021. However, in 2022, Shopify has seen a drastic fall in its revenues with growth slipping to 21 per cent in the first quarter of 2022 and further down to 19.1 per cent in the second quarter of 2022.
Moreover, Shopify has lost 75 per cent of its share value so far in this year.
As part of this layoff, people in roles such as recruiting, support and sales units will be impacted the most. Moreover, overspecialised positions and duplicated roles will also be eliminated.
Shopify grew from a 1,900 team in 2016 to a 10,000-strong workforce by the end of 2021, as per the Company filings.
Many companies in the recent past have seen layoffs and hiring freezes, includingTwitter, Meta, Tesla, Google, and Microsoft.