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Tobias Lütke, the founder of Shopify, announced that it is letting go of ten percent of its workforce. He blamed himself for misjudging trends, resulting in too many employees.
Reason for Layoffs
Shopify CEO Lütke published a letter on the company website explaining why Shopify was laying off so many employees.
The main reason for the layoffs was rapid hiring to accommodate increased ecommerce shopping trends.
What was anticipated at Shopify was that the rapid Covid-era increase in ecommerce shopping would continue as a trend, hastening a greater adoption of online shopping.
The letter explained:
“When the Covid pandemic set in, almost all retail shifted online because of shelter-in-place orders.
Demand for Shopify skyrocketed. To help merchants, we threw away our roadmaps and shipped everything that could possibly be helpful.”
Unfortunately, the forecasted boom in post-Covid shopping failed to materialize.
The CEO said that he decided to scale up hiring to meet the increased demand and that now that the projections are falling short, he was forced to make a difficult decision.
Shopify employees face a layoff in recruiting, support roles, and sales.
The letter noted:
“…we’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products.”
According to affected employees posting on Twitter, some who are laid off receive a good severance package.
The CEO also tweeted that any businesses interested in hiring any of the laid off employees can contact Shopify at placement@shopify.com.
Shopify Employees React
Among those affected is Kevin Indig, a well-known search marketing community member and a now former member of the Shopify Growth Team.
Kevin shared an update in a tweet:
Unfortunately, I was also impacted by Shopify’s layoffs.
Truth is, I am and will be fine. Shopify’s severance package is very generous.
If you’re hiring, keep an eye out for my talented colleagues!
I’ll take the summer off and then decide what’s next in fall. ✌️
— Kevin_Indig (@Kevin_Indig) July 27, 2022
Another employee tweeted:
After less than a year at Shopify, I was impacted by yesterday’s layoffs am now looking for work again.
This is pretty sudden and unexpected for both me and my whole team, and is the first time I have ever been laid off/downsized, etc. I am still processing this,
1/3
— Vance Lucas (@vlucas) July 27, 2022
wondering “why me?” when things were going well, and trying to figure out what comes next for me.
I am taking this week to think about my next steps, but in the meantime feel free to reach out if you have any Eng Mgmt/Lead openings, especially for frontend/React teams.
2/3
— Vance Lucas (@vlucas) July 27, 2022
I have a ton of deep knowledge and experience that I would love to put to good use for a company that values it. My DMs are open. #Shopify #layoffs
3/3
— Vance Lucas (@vlucas) July 27, 2022
Citation
Read the Letter Posted to Shopify Announcing Layoffs
Featured image by Shutterstock/Teacher Photo