The Ottawa-based company’s CEO, Toby Lutke, said in a blog post that most of the employees affected by the decision work in recruitment, support, and sales. (Photo: Canadian Press)
Ottawa – Shopify (SHOP.TO, $39.46, down 16% at 10:30 a.m.) on Tuesday said it was laying off 10% of its workforce because the company misjudged e-commerce growth.
The Ottawa-based company’s CEO, Toby Lutke, said in a blog post that most of the employees affected by the decision work in recruitment, support, and sales.
Shopify will also eliminate “over-specialization” and “duplication” of positions, as well as certain groups, which Lütke said were “practical but too far away from product implementation.”
The company must make the layoffs because the COVID-19 pandemic has caused demand for Shopify software to skyrocket as consumers shop more online, the boss said.
Shopify is betting that the number of purchases consumers will make online rather than in physical stores will grow five or 10 years earlier than its pre-pandemic projections.
But that prediction has not come true, and people are returning to their pre-pandemic shopping habits, forcing society to cut spending.
“In the end it was my decision to make this bet and I was wrong. Now we need to adjust,” Lutke said.
“As a result, we have to say goodbye to some of you today, and I deeply regret it.”