Shopify, which is a leading tech company, has also joined the ranks of those who are introducing layoffs. However, the company is also increasing the pay for its existing employees. But this doesn't discount the fact that the company has already laid off around 10% of its employees already.
In the month of August, around 70 people were let go, according to insider information. When the relevant people were asked for more information, they said that they were not authorized to share the matter publicly.
According to experts, even if we account for the recent layoffs, it is only around 1% of the Shopify workforce. The recent layoffs in the last few months tell us that Shopify employment growth has started to take a U-turn.
In 2019, around 5000 people were working for the Shopify company, and that increased in 2020 to around 7000. On 31st December 2021, around 10,000 people were working for the company, according to an SEC report.
After the layoffs, it seems that only 8800 people are working for Shopify (globally). Next year will be the first year since the pandemic that the company will start with fewer employees than the last year.
The company shared a memo with staff in July in which the Shopify CEO expressed his mistake. He said that they overestimated the growth of e-commerce and believed that the pandemic-led boost would keep on going. As a result, the company went on a hiring spree only to experience the slowdown of that pandemic-led boost in e-commerce.
The company has also seen a decline in its sales since the e-commerce growth is now returning back to normal values.
Shopify had originally hired a little too many people to meet the higher demand. It was true during the early days of the COVID-19 pandemic, but that's no longer the case.
According to the officials, they made a bet which was wrong, unfortunately, and the recent layoffs will be a piece of difficult news for everyone involved.