Canadian ecommerce firm Shopify is set to lay off 1,000 employees after founder and chief executive Tobi Lütke said the business made the “wrong” bet on the long-term growth of online retail post-pandemic.
Shopify will primarily cut roles across recruiting, support and sales, but Lütke said some “over-specialised and duplicate roles” and roles that were “too far removed from building products” would also be affected.
In a letter to staff, Lütke said the share of online versus physical retail spend was “reverting to where pre-Covid data would have suggested it should be” in 2022 and the group’s “big strategic bet” during the pandemic – that ecommerce market share “would permanently leap ahead by five or even 10 years” – had not paid off.
Shopify had 10,000 employees at the end of last year, up from 7,000 in 2020, in anticipation of this shift, which has not materialised.
“Ultimately, placing this bet was my call to make and I got this wrong. Now, we have to adjust. As a consequence, we have to say goodbye to some of you today and I’m deeply sorry for that,” said Lütke.
He added that Shopify still has a “massive” opportunity to grow post-pandemic.
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