Shopify layoffs: Ottawa company cutting 10 per cent of staff

Shopify Inc. says it will layoff 10 per cent of its workforce because the company misjudged the growth of e-commerce.

The Ottawa company’s chief executive Tobi Lutke says in a blog post that most of the staff impacted by the cut work in recruiting, support and sales.

Shopify will also eliminate “over-specialized and duplicate” roles as well as groups that Lutke says were “convenient to have but too far removed from building products.”

He says the company is carrying out the cuts because the COVID-19 pandemic created a surge in demand for Shopify’s software as consumers shifted to making a higher number of purchases online.

Shopify bet the amount of shopping people did online instead of at brick-and-mortar retailers would leap ahead by five or 10 years from pre-pandemic predictions.

Lutke says that prediction has not been true and people are reverting to pre-pandemic shopping habits, forcing Shopify to make cuts.

“Ultimately, placing this bet was my call to make and I got this wrong. Now, we have to adjust,” said Lutke.

“As a consequence, we have to say goodbye to some of you today and I’m deeply sorry for that.”

This report by The Canadian Press was first published July 26, 2022.

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