Shopify Cuts 10% Workforce

Canadian multinational e-commerce company, Shopify Incorporated has announced that it is laying off 10 percent of its workforce as the e-commerce company struggles with slowing growth due to a pullback in online shopping after benefiting from a pandemic-fueled surge in demand.

The company's shares tumbled 14.7 percent on the U.S. bourses and on the Toronto Exchange while losing 75 percent of their value so far in the year.

Shopify's turn of fortunes from the most valuable company in Canada last year to its present-day struggle to increase sales comes as easing lockdowns have led consumers to return to brick-and-mortar stores.

Its sales growth during the pandemic led the Ottawa-based company to ramp up hiring and invest in technology, betting that the shift to online from physical retail shops would not subside.

"It's now clear that bet didn't pay off," Chief Executive Tobi Lütke said in a blogpost, adding that roles in recruiting, sales, and support are the most affected.

The company had 10,000 employees as of Dec. 31, a regulatory filing showed, up from 7,000 at the end of 2020.

"Ultimately, placing this bet was my call to make and I got this wrong."