E-commerce platform Shopify will cut 1,000 jobs after a rapid expansion didn’t yield the expected results.
This amounts to roughly 10 per cent of the Canadian company’s total workforce. CEO Tobi Lutke conceded that a gamble to expand after the pandemic didn’t pay off. The affected roles will mostly be across sales, support and recruiting.
After news of the cuts was made public, Shopify shares tumbled 14 per cent.
“We bet that the channel mix — the share of dollars that travel through e-commerce rather than physical retail — would permanently leap ahead by five or even 10 years because of the pandemic,” Lutke wrote.
“It’s now clear that bet didn’t pay off. What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point.”
Shopify shares have fallen 77 per cent this year alone.
