Reuters/Lucas Jackson
Shopify is laying off about 1,000 people.
The layoffs come after the company’s growth has slowed post-pandemic.
“It’s now clear that bet didn’t pay off,” CEO Tobi Lütke wrote in a company memo.
Shopify is laying off about 1,000 employees, the Wall Street Journal was first to report Tuesday, citing an internal memo sent by CEO Tobi Lütke.
According to the memo, which Shopify posted to its corporate website, the cuts are being made because Shopify mistakenly believed that the e-commerce bump fueled by the Covid-19 pandemic would continue.
“When the Covid pandemic set in, almost all retail shifted online because of shelter-in-place orders. Demand for Shopify skyrocketed,” wrote Lütke.
“Shopify has always been a company that makes the big strategic bets our merchants demand of us — this is how we succeed,” he continued. “We bet that the channel mix — the share of dollars that travel through ecommerce rather than physical retail — would permanently leap ahead by 5 or even 10 years. We couldn’t know for sure at the time, but we knew that if there was a chance that this was true, we would have to expand the company to match.”
“It’s now clear that bet didn’t pay off,” Lütke wrote. “Ultimately, placing this bet was my call to make and I got this wrong.”
This story is developing. Check back for updates.
If you’re a Shopify employee affected by the layoffs or have a story to tell, contact this reporter at [email protected] or on the secure messaging app Signal at 646-889-2143.