Shopify To Lay Off 20% Of Its Workforce In 2nd Round

Shopify, Canadian multinational e-commerce company, is all set to lay off 20% of its workforce in second round of layoffs, said its CEO Tobi Lutke. The company is also planning to sell most of its logistics business to leading supply-chain technology company, Flexport, added Tobi Lutke, according to a Reuters report.

Shopify declared better-than-expected results for the first quarter, as more merchants used its online tools and targeting services to attract customers tackling high inflation, added the Reuters report.

A host of new tools have encouraged more businesses from Mattel to Coty to join the platform, allowing the company to hike its subscription fees. Known as the e-commerce platform for small businesses, Shopify had ramped up its order fulfillment network, when it expected the pandemic-led e-commerce boom to persist. But by mid-2022, it said it had over overestimated growth levels and laid off 10% of its workforce in July, as per the Reuters report.

As the e-commerce boom brought by the global pandemic subsides, Shopify's spending in the fulfillment network has been more closely scrutinized by investors who worry the capital-intensive project could weigh on earnings.

Shopify declared an adjusted profit of 1 cent per share, compared with expectations for a 4 cent loss.