The layoffs follow a similar downsizing in July as the ecommerce platform provider struggles to unwind a costly mistake in logistics acquisitions.

Shopify Inc. will cut jobs for the second time in 10 months and has agreed to sell the majority of its logistics business to Flexport Inc. as it faces a challenging climb back from last year’s slump.

“I don’t want to bury the lede: after today, Shopify will be smaller by about 20% and Flexport will buy Shopify Logistics; this means some of you will leave Shopify today,” CEO Tobi Lütke said in a memo to staff. “I recognize the crushing impact this decision has on some of you, and did not make this decision lightly.”

The company expects to incur severance charges of $140 million to $150 million.

“Our numbers were unhealthy, just like it is in much of the tech industry,” Lütke said. “With the right numbers, we’ll fully focus on outcomes and impact.”

Shopify earnings

The ecommerce platform provider also announced its fiscal first-quarter earnings on May 4. It said revenue increased 25% to $1.5 billion compared to the prior year.


Gross merchandise volume, the total value of merchant sales across Shopify’s platforms, was $49.6 billion. That’s above Wall Street projections of $47.68 billion, and some $6.4 billion higher than comparable quarter of 2022.

The Ottawa-based company also gave an outlook for the second quarter, saying it expects revenue to grow at a similar rate to the first quarter growth rate on a year-over-year basis. It also expects to achieve free cash flow profitability for each quarter of 2023.

Shopify bet early in the pandemic that a rapid rise in online shopping, fueled by customers staying home, would become permanent. As that wager soured, Lütke has attempted to turn the company around. It cut about 1,000 jobs last summer, raised prices and focused on building out client offerings and its in-house fulfillment network. Shopify had 11,600 employees at the end of 2022.

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