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.

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.

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How does this impact Canadian 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.

If you’ve been laid off or are facing termination, here’s what you should know:

• You Are Likely Owed Severance: Employees at Shopify are entitled to full severance pay under Canadian employment law.
• What Severance Includes: Severance packages can cover salary, bonuses, commissions, benefits, and more.
• Rights Don’t Change: Even in times of corporate restructuring, your rights as an employee remain protected.

For a detailed overview of Shopify’s layoff history and severance entitlements, visit our Shopify Layoffs: Severance Pay for Employees guide.

Key severance facts for Shopify employees

If you’ve lost your job due to the closure, here’s what you need to know about severance in Canada:

• Severance Pay: Can be up to 24 months’ pay, depending on your role, age, length of service, and ability to find similar work.
• Deadlines: You have up to two years from your termination date to pursue a claim for severance.
• Misclassified Employees: Contractors may also be eligible for severance if misclassified as independent contractors.

Use our Severance Pay Calculator to estimate what you’re owed.

Steps to take if you’ve been laid off

1. Don’t Sign Anything Yet: Before accepting any severance offer, have it reviewed by an employment lawyer to ensure it’s fair.
2. Understand Your Rights: Learn about severance pay and employment standards through our Shopify Layoffs Guide.
3. Contact Us for Help: Book a consultation with our team for a detailed review of your severance package and employment contract.

Talk to an employment lawyer

If you’ve been affected by layoffs at Shopify, it’s critical to understand your rights and secure the compensation you’re owed. Contact us today for expert legal advice and a free consultation.

Our lawyers in Ontario, Alberta, and B.C. have successfully represented tens of thousands of non-unionized individuals. In addition to severance package negotiations, we can assist you on a broad range of employment matters, including:

Call 1-855-821-5900 or complete a quick form to get started.