Report: Shopify cuts 70 more workers, boosts pay for remaining staff

After laying off 10 per cent of its workforce in July, Ottawa-based Shopify is trimming its headcount even more.

According to a report by The Globe and Mail, the Canadian e-commerce giant cut an additional 70 employees in August as it continues to grapple with a sector-wide downturn.

In a blog post on July 26, 2022, CEO Tobi Lütke acknowledged that the company misjudged the growth of e-commerce during the COVID-19 pandemic. While he took responsibility for the miscalculation, it resulted in deep and immediate cuts for those working in Shopify’s recruiting, support, and sales divisions.

During the layoff announcement, Lütke added that the company was also planning to remove “over-specialized and duplicate” roles as well as groups that it believes are convenient to have, but are too far removed from building products.

The latest reduction comes as sources tell the The Globe that most employees either received individual bonuses worth as much as five per cent of their salaries last month or saw their entire team’s compensation increase by as much as 40 per cent per worker.

The North American tech sector has experienced a flurry of layoffs in recent months. In addition to Shopify, Snap, Hootsuite, Article, Unbounce, Clearco, Q4, and Wealthsimple have significantly reduced their workforces as they continue to monitor market conditions.

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Termination agreements for Shopify employees

According to The Globe’s report, Shopify is providing staff affected by the latest round of layoffs with similar severance packages to those who were let go in July:

• 16 weeks of pay and an extra week for every year that they have been with the company
• An extension of medical benefits and outplacement services
• The ability to keep their home office furniture and equipment

However, many of the tech company’s laid off staff may be owed much more compensation than this initial offer. Employees at Shopify are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring.

Severance can be as much as 24 months’ pay, depending on numerous factors.

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• Severance packages in mass layoffs
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LISTEN: Employment lawyer Alex Lucifero joined Matt Harris on Newstalk 580 CFRA to discuss layoffs at Shopify and an employee’s right to severance if they are let go.

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract. We can tell you if what you have been provided is fair, and how to get proper compensation if it falls short of what you are actually owed.

If you aren’t given the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.