Shopify, the Canadian e-commerce provider that operates thousands of fashion stores, is laying off 10 percent of its workforce.
Around 1,000 of the 10,000 employees are to be made redundant. The areas of customer support, recruitment and sales are particularly affected.
Shopify CEO Tobi Lutke said in a note on Tuesday that the workforce reductions would be enforced by the end of the day, with severance packages of up to four months being granted. Shopify saw strong demand for its e-commerce services early in the pandemic, and the company responded with strong growth and rapid expansion to meet market needs. The company didn’t expect demand for physical retail stores to return to pre-pandemic levels and grow at a slower pace.
Shares fell 16 percent on the day of the announcement, a stark contrast after the company was among the hottest pandemic stocks during the online Covid boom. Analysts lowered second-quarter expectations earlier in the year after Shopify missed first-quarter earnings expectations.
This translated post previously appeared on FashionUnited.uk.