- Shopify Inc SHOP braces to slash 1,000 workers, or 10% of its global workforce, marking a retreat from its pandemic bet on e-commerce growth, the Wall Street Journal reports.
- Founder and CEO Tobi Lütke justified the layoffs citing the resumption of old shopping habits and pull back on the online orders that fueled the company’s recent growth.
- Shopify, which helps businesses set up e-commerce websites, saw a slowdown in FY22 revenue growth.
- Lütke said he had expected that surging e-commerce sales growth would last past the Covid-19 pandemic’s ebb. “It’s now clear that bet didn’t pay off,” he added.
- Shopify will cut jobs in all its divisions. However, most layoffs will occur in recruiting, support, and sales units.
- Shopify also looked to eliminate over-specialized and duplicate roles, and some groups were convenient but too far removed from building products.
- Shopify offered 16 weeks of severance to the laid-off workers, plus one week for every year of service.
- Shopify’s job cuts were among the largest in a wave of layoffs and hiring freezes by tech companies grappling with rising interest rates, supply-chain shortages, and the reversal of pandemic trends.
- Netflix, Inc NFLX, Twitter, Inc TWTR Tesla, Inc TSLA embraced job cuts while other firms, including Microsoft Corp MSFT and Alphabet Inc’s GOOG GOOG Google opted for hiring ease down for the rest of the year.
- Price Action: SHOP shares traded lower by 12.3% at $32.20 in the premarket on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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