Around 10% (1000) employees of Shopify will be laid off from its global workplace, as announced just a few days ago. As a result of this announcement, Shopify's stock plunged by 14% which signifies the investor's worries about the company.
CEO of Shopify Tobi Lutke sent a memo to staff in which he acknowledged that the company made an assumption that the pandemic era boom in e-commerce will continue. Now that reality has shown a different side, it seems that Shopify will have to cut down its expenses.
One of the ways through which Shopify will scale down and cut expenses is by letting go of 1000 employees out of the 10,000 total workforces.
The recent cut is planned to affect all the major divisions of Shopify including support, sales, and recruiting. The recent decision will also eliminate any duplicate and over-specialized roles in the company. Another group which will have to leave are those people who were convenient for the company at best.
If we look around, it seems that the trend of announcing layoffs is happening in various tech companies. A lot of these companies have been rescinding offers and even freezing new hiring of staff. According to experts, the reason for this is the wearing-off of the COVID-19 effect and the uncertainty in the economy.
Earlier, Facebook and Google also announced a slowdown in new hiring to cut down on costs.
Shopify which is based in Canada specializes in making platforms and tools for people to sell online. The e-commerce sector which saw a boom during the pandemic also pushed the Shopify stock higher as more people were doing ecommerce.
According to Shopify, they believe that the number of people spending money online will increase in the next 5 to 10 years. So in that se'se, it seems that the leading e-commerce plat'orm Shopify will also have a lot to gain.