Shopify Inc. says it will reduce 23 per cent of its workforce and sell its logistics business, another massive shakeup for the Canadian tech giant and its second round of layoffs in the course of a year.
The Ottawa-based e-commerce company positioned the moves as a way to help it focus on its “main quest” to make commerce easier.
Shopify said in corporate filings Thursday that itthat its workforce would shrink by roughly a quarter through layoffs and the sale of its logistics business.
In an open letter Thursday, chief executive Tobi Lutke did not quantify how many staff would be departing the company, but before Shopify laid off about 1,000 staff last summer it had roughly 10,000 employees.
“I recognize the crushing impact this decision has on some of you, and did not make this decision lightly,” Lutke wrote.
The chief executive said Shopify had a number of “side quests” that had begun to “split focus,” and so the company has been “subtracting everything” over the past year to make sure it was as focused as possible on its primary mission.
In that vein, Lutke said the company has also decided to sell Shopify Logistics to Flexport, a supply chain management company, to help the business become more ambitious and global in nature.
Under the terms of the agreement, Shopify will receive stock representing a 13 per cent stake in Flexport and the ability to name a director to Flexport’s board.
Lutke also hinted that the company will lean further into artificial intelligence in the future, calling AI a possible “copilot for entrepreneurship.”
“We are at the dawn of the AI era and the new capabilities that are unlocked by that are unprecedented. Shopify has the privilege of being amongst the companies with the best chances of using AI to help our customers,” he wrote.
The company also beat Wall Street estimates for first-quarter revenue, sending its U.S.-listed shares up 16 per cent in trading before the bell.
The company posted revenue of US$1.51 billion in the quarter ended March 31, compared with analysts’ estimate of US$1.43 billion, according to Refinitiv data.
— With files from Canadian Press, Reuters
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