Shopify is laying off 10% of its global workforce, which is roughly around 1,000 workers. Shopify CEO and founder Tobi Lütke said; “Shopify has to go through a reduction in workforce that will see about 10% leave by the end of the day.”
Shopify to Layoff Staff from Three Departments
Tobi mentioned that Shopify will eliminate over-specialized and duplicate roles, across the company, as well as some groups that were convenient to have but too far removed from building products. He said that the layoffs will mostly affect people in recruiting, support, and sales department. Shopify said that the employees who are laid off will receive 16 weeks of severance pay, plus one week for every year of tenure at the company.
According to an international media outlet, In 2016, Shopify’s workforce jumped from 1,900 to around 10,000 in 2021 to meet the ever-growing demand. But things started to revert as soon as physical stores started opening and people shifted to pre-covid times. Lütke said; “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.” He further added that the company will provide career coaching to help affected employees find another job.
Shares Plunge
Shopify’s share price fell by more than 14 percent soon after the company revealed that it will lay off 10 percent of its workforce. By the closing bell, they’d recovered a bit, but were still down $6.42 to $40.69, a drop of 13.63 percent on the day. Neil Saunders, managing director of GlobalData, said; “Incorrect assumptions are largely to blame for Shopify’s follies. This was a huge strategic mistake that was driven by an insufficient understanding of customer behavior, a lack of rigor in analyzing the market, and a bit of hubris.”
Read more: $44 Billion Twitter Deal: Twitter Blamed Elon Musk for its Revenue Drop
