Shopify announces additional 20% workforce reduction amid strategic changes

Less than a year after cutting its workforce by 10 per cent, Shopify is trimming its headcount even further.

In an open letter to staff on May 4, CEO Tobi Lutke said the e-commerce giant is reducing its workforce by approximately 20 per cent and selling Shopify Logistics to Flexport, a supply chain management company.

“For the past year we’ve been subtracting everything that’s in the way of making the best possible product,” Lutke said.

“This is extremely important, because we are heading into a decade of high velocity and massive change. We will require speed, agility, and a great deal of innovation.”

According to reports, Shopify had around 10,000 employees before eliminating 1,000 jobs last summer.

20 per cent of the remaining workers would amount to about 1,800 people.

Shopify employees hired by Flexport

• Seniority protection: Flexport must recognize your total length of service, including time at Shopify. If terminated later, your severance will reflect this combined service.
• Review your contract: If Flexport offers a new employment contract, consult an employment lawyer at Samfiru Tumarkin LLP. We’ll ensure it doesn’t limit your severance or erase your seniority.
• Declining Flexport’s offer: If you decline a job offer due to significant changes in your role, location, or pay, you could still qualify for full severance from Shopify. Contact us to learn your rights before deciding.

Shopify employees not hired by Flexport

Employees who aren’t hired by Flexport are entitled to full severance pay from Shopify Logistics.

Major tech layoffs continue

Shopify joins the growing list of major North American tech companies that have announced sweeping layoffs in 2023.

Several big names, including Dropbox, Meta, Amazon, Kyndryl, Alphabet, Dell, Clearco, and Microsoft, are significantly scaling back their staffing levels as they continue to navigate challenging economic conditions.

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How does this impact Canadian employees?

Shopify didn’t disclose how many Canadian employees are affected by the latest round of cuts. According to LinkedIn, Shopify has more than 6,400 workers in Canada.

Lutke claims affected Shopify employees will:

• Receive a minimum of 16 weeks of severance pay — plus a week for every year of tenure at the company
• Have access to medical benefits, the company’s employee assistance program (EAP), and outplacement services
• Be able to keep all office furniture that was provided by the company (work laptops will need to be returned)
• Have free access to the advanced Shopify plan (for staff looking to take an entrepreneurial path in future)

However, Canadian workers could be owed significantly more compensation than Shopify’s 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.