‘I Got This Wrong’: Shopify Announces Major Layoffs

‘I Got This Wrong’: Shopify Announces Major Layoffs
An employee works at Shopify's headquarters in Ottawa on Oct. 22, 2018. Chris Wattie/REUTERS
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Canadian eCommerce company Shopify Inc. informed employees on July 26 that it is laying off about 1,000 workers, or 10 percent of its workforce, effectively immediately.

“Shopify has to go through a reduction in workforce that will see about 10 percent leave by the end of the day,” said CEO and founder Tobi Lütke in the email, posted on the company’s website on July 26.

Most of the impacted roles are in recruiting, support, sales, and over-specialized and duplicate roles, as well as some groups that “were convenient to have but too far removed from building products,” Lütke said.

Lütke said he decided to increase the staff in the company as it was predicted that the eCommerce retail growth rate was going to rise significantly during the pandemic. However after 2021 the rate of online retail sales started to decline to previously predicted levels of business without the factors of the lockdowns.

“Ultimately, placing this bet was my call to make and I got this wrong.” he said in the email. “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.”

Those being laid off will get 16 weeks of severance pay, plus an additional week for every year of tenure at at the company.

Lütke founded Ottawa-based Shopify in 2006 to provide essential internet infrastructure for eCommerce. Investopedia reported in November 2021 that Shopify is “the largest publicly-traded Canadian company in any industry,” with a market capitalization of $206 billion.