Correction Leads To Layoffs

Shopify is laying off 10 per cent of its workforce (approximately 1,000 employees) because the eCommerce increase fueled by the pandemic is not as permanent as the company thought it would be. In a post on the company’s corporate website, Tobi Lütke, the company’s founder and CEO, said that his bet that the surge in online activity that started during the pandemic would continue was wrong. “What we see now is the mix reverting to roughly where pre-COVID data would have suggested it should be at this point. [It is] still growing steadily, but it wasn’t a meaningful five-year leap ahead.” Since the company is mostly invested in digital commerce, it now must make an adjustment to align with the current reality of sales. It plans to do that by way of the layoffs. Shopify’s total revenue in the second quarter of 2022 grew 16 per cent versus the second quarter of 2021, a much more modest increase than the 57 per cent increase in total revenue in the second quarter of 2021 compared to 2020 and 97 per cent increase in 2020 over 2019.