Online shopping platform Shopify announced on Tuesday that it would lay off 10% of its employees, or about 1,000 people, because the mass adoption of e-commerce during lockdowns did not translate into changing habits as quickly as it hoped.
“Around 10% of the staff will be gone by the end of the day,” said Tobi Lübke, the head of the Canadian company, in a letter addressed to his teams and posted on his site.
The Shopify co-founder explains that he has recruited there in recent years based on predictions based on trends linked to the Covid-19 pandemic.
“It is now clear that this gamble was not worth it,” he admitted, saying “I am deeply sorry.”
runaway inflation
According to figures from the Ottawa-based group, the share of online sales “continues to grow steadily”, but has returned to the level expected before the health crisis skewed the calculations.
The online store hosting platform for SMEs lost more than 15% on Wall Street at 18:00 GMT.
Many other tech companies have decided to lay off staff or slow down hiring, after two years of profiting hugely from the explosion in consumer online habits.
They started dating and working in the office again. Above all, rampant inflation, rising interest rates and supply chain difficulties are affecting the company’s operations and driving up labor costs.
Netflix and Twitter have laid off a few hundred people. Microsoft and Alphabet, the parent company of Google, have revised down the pace of hiring.
The Shopify employees affected by the job cuts are primarily from the human resources and sales departments, the chief said. They will receive 16 weeks of severance pay and an additional week for each year they spend with the company.
Source: BFM TV
