Shopify’s (SHOP) stock sank after the Canadian e-commerce company announced that it plans
to cut its workforce by 10%.
The headcount reduction involves about 1,000 employees at the Ottawa-based company and
comes amid deteriorating market conditions, the company said. Most of the positions being
eliminated are in recruiting, support, and sales at Shopify.
The company’s stock fell 14% after the workforce cuts were made public and finished trading in
Toronto at $40.69 per share. Year-to-date, the stock has fallen 74%.
The downturn in the share price has been a reversal from the pandemic when the stock rose
178% in 2020 as businesses were forced online and many relied on the products offered by
Shopify.
However, as COVID-19 restrictions eased and consumers returned to in-person shopping,
Shopify’s stock has cratered. Analysts continue to downgrade the stock.
In a memo to staff announcing the job cuts, Shopify chief executive officer (CEO) Tobi Lütke
said that the company made a bet that the pivot to e-commerce would “permanently leap ahead
by five or even 10 years... It’s now clear that bet didn’t pay off.”
