E-commerce giant Shopify has laid off 20 percent of its workforce, which is about 2000 employees, as the company plans to change its shape to pay unshared attention to its core mission.
Shopify CEO Tobias Lutke said the company plans to focus on its main quest of making commerce easier and is moving away from its side quest objectives.
Addressing the reason for the downsizing of the company’s workforce, Shopify wrote,
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“We are changing the shape of Shopify significantly today to pay unshared attention to our mission. There are a number of consequences to this, and I don’t want to bury the lede, after today Shopify will be smaller by about 20% and Flexport will buy Shopify Logistics; this means some of you will leave Shopify today.
“I recognize the crushing impact this decision has on some of you and did not make this decision lightly. In the next 5 minutes, you’ll get a follow-up that tells you if you are affected. There’s no way to make this good news, but we designed a package that will attempt to make it the best possible version of a bad day. I’ve included details below on how we will support you”.
In terms of job losses, it is unclear which departments are impacted outside of the Logistics business. However, workers who are impacted by the layoff will receive a minimum of 16 weeks severance plus a week for every year of tenure at Shopify. They will also get Medical benefits and access to Shopify’s employee assistance program (EAP). Also, they will continue to have free access to the advanced Shopify plan should they opt to take an entrepreneurial path in the future.
The company further revealed that for the past years, it has been subtracting everything that’s in the way of making the best possible product, which is extremely important because it is heading into a decade of high velocity and massive change. It added that the company will require speed, agility, and a great deal of innovation.
It is worth noting that Shopify had aggressively built out an order-fulfillment network in recent years on expectations that a pandemic-fueled demand boom would last, mirroring similar moves by rivals.
But that bet unraveled last year, sharpening investor scrutiny of the capital-intensive project that could weigh on earnings, and forcing the company to cut 10% of its workforce in July. Shopify’s main quest is to make commerce simpler, easier, more democratized, more participatory, and more common.
