Shopify Inc (TSX: SHOP) is set to become the latest major firm engaging in layoffs amid the economic downturn post-pandemic. The tech firm is said to be laying off up to 10% of its global staff, based on an internal memo first reported on by the Wall Street Journal.
The cuts are expected to impact roughly 1,000 employees, and comes amid the company stepping back from a major bet on e-commerce growth that it took during the pandemic. The cuts are expected to occur largely in support and sales units, as well as recruiting, and are set to include certain over-specialized roles.
Company CEO Tobi Lutke reportedly stated that consumers are resuming pre-pandemic shopping habits, reducing their tendencies for online shopping.
“It’s now clear that bet didn’t pay off. Ultimately, placing this bet was my call to make and I got this wrong,” Lutke commented, referring to the bet by the company that consumers would continue to prefer online shopping on a post-pandemic basis.
The decision to conduct layoffs follows Lutke last month securing 40% voting power of the company via a special founders share. This comes despite the company’s valuation declining over 73% since the start of the year.
Shopify last traded at $47.11 on the TSX.
Information for this briefing was found via Sedar and Shopify. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
