E-commerce platform Shopify has announced layoff of 2,000 people which makes 20 per cent of its workforce.
The company also announced that American multinational corporation Flexport will buy Shopify Logistics.
Tobi Lutke, CEO of Shopify said, "Shopify will be smaller by about 20 per cent and Flexport will buy Shopify Logistics; this means some of you will leave Shopify today. I recognise the crushing impact this decision has on some of you, and did not make this decision lightly."
Severance for employees
The impacted employees will receive a minimum of 16 weeks severance plus a week for every year of tenure at Shopify.
"Medical benefits and access to our employee assistance program (EAP) will be covered through this same period. We'll also offer outplacement services if you want them, all office furniture we provided is yours to keep," the CEO said in a blog post late on Thursday.
He also added, "We legally need the work laptop back, but we'll help pay for a new one to replace it. You'll have continued free access to the advanced Shopify plan should you opt to take an entrepreneurial path in future."
In July 2022, Shopify fired around 1,000 employees across verticals which forms 10 per cent of its employees. This was as the company failed to predict that the e-commerce industry would continue to grow beyond the pandemic at the same pace it did during the two-year period.
Shopify's workforce jumped from 1,900 in 2016 to around 10,000 in 2021 to meet the expected growth. However, Lutke had said that it was now clear that the bet didn't pay off.
With input from PTI