Shopify laying off 10% of workers, misjudged e-commerce growth

After scaling up its workforce to meet the demand it projected during the COVID-19 pandemic, Ottawa-based Shopify is laying off 10 per cent of its staff.

In a letter to employees that was made public on July 26, CEO Tobi Lütke said that the Canadian e-commerce giant made a bet that the global retail transition to e-commerce, which picked up during the pandemic, would continue to accelerate. “It’s now clear that bet didn’t pay off,” he said.

In a blog post, Lütke added that most of the staff impacted work in recruiting, support, and sales. Shopify also plans 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.

This was a very hard decision and a very hard message to write. Shopify is full of remarkable people. Today we have to say farewell to some of them. If you are hiring, contact placement@shopify.com and we will provide you with contact information

— tobi lutke (@tobi) July 26, 2022

Once the country’s most valuable company, Shopify’s website claims that it employs more than 10,000 people around the world.

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• Report: Shopify cuts 70 more workers, boosts pay for remaining staff
• Shopify lays off staff in switch to remote work

Termination agreements for Shopify employees

As part of the layoff announcement, Shopify said it will provide 16 weeks of severance pay, plus one week for every year an employee spent working for the company.

Many of the tech company’s laid off staff may be owed much more than this initial offer. The package will also remove restrictions on when former employees can sell their company stock, and medical benefits will be provided.

READ MORE
• Severance packages in mass layoffs
• Severance for technology industry employees
• Layoffs in Canada

LISTEN: An employment lawyer at Samfiru Tumarkin LLP explains what rights workers have when Shopify and other big companies announce mass layoffs during The Employment Law Show on 640 Toronto.

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.

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.