Consumers have returned to their pre-pandemic shopping habits, forcing Shopify to cut staff (archives).
Shopify on Tuesday announced the layoff of 10% of its workforce because the company misjudged the growth of e-commerce.
The company's CEO based in Ottawa's Tobi Lütke said in a blog post that most of the employees affected by this decision work in recruiting, support and sales.
Shopify will also eliminate overspecialization and duplicate positions, as well as certain groups that Lütke said were practical but too far removed from product realization.
According to the boss, the The company has to make the layoffs because, initially, the COVID-19 pandemic caused demand for Shopify's software to surge as consumers began to make more online purchases.
Shopify bet that the amount of purchases consumers would make online, rather than in physical stores, would jump 5 or 10 years from compared to its pre-pandemic predictions.
But later that prediction didn't come true and people revert to their pre-pandemic shopping habits, forcing the company to make cuts.
Ultimately, making this bet was my decision and I was wrong. Now we have to adjust, Lütke said. Accordingly, we must say goodbye to some of you today, and I am deeply sorry for that.