On Thursday, Shopify, the Canadian e-commerce company, announced that it would be laying off 20% of its workforce, or about 2,300 employees. The layoffs come as the company faces slowing growth and increased competition from rivals like Amazon and Walmart.
In a memo to employees, CEO Tobi Lütke said that the layoffs were necessary to “ensure that we are best positioned for long-term growth and success.” He added that the company would be providing severance packages and other assistance to affected employees.
The layoffs are the second round of job cuts for Shopify in the past year. In July 2022, the company laid off 10% of its workforce.
Shopify’s stock price fell sharply in the wake of the layoff announcement. Shares were down more than 20% in after-hours trading.
The layoffs come at a time when Shopify is facing a number of challenges. The company’s growth has slowed in recent months, as the e-commerce boom that began during the COVID-19 pandemic has begun to subside. Shopify is also facing increased competition from rivals like Amazon and Walmart, which are investing heavily in their own e-commerce platforms.
Shopify is not the only e-commerce company that is facing challenges. Etsy, another major e-commerce platform, announced earlier this month that it would be laying off 10% of its workforce.
The layoffs at Shopify and Etsy are a sign of the challenges that e-commerce companies are facing in the current economic environment. With inflation rising and consumer spending slowing, e-commerce companies are finding it more difficult to grow their businesses.
It remains to be seen how Shopify will fare in the coming months. The company has a strong brand and a loyal customer base, but it will need to find ways to grow its business in a more challenging environment.