Canadian e-commerce platform Shopify laid off about 10 percent of its workers Tuesday as a pandemic-driven boom in online shopping has waned.
The reduction in workforce came while US tech giants scale
back or even pause hiring due to economic conditions roiled by inflation and
the war in Ukraine.
Most of the layoffs would be in areas not involved in
building products, Shopify chief executive Tobias Lutke said in an email to
employees that the firm posted online.
Shopify beefed up its team as online shopping boomed during
the pandemic, gambling that the lifestyle shift would remain even when
restrictions eased, Lutke told workers.
"It's now clear that bet didn't pay off," Lutke
said. "The next part of the journey will involve fewer teammates than we
have picked up along the way."
Based on the firm's previous reporting of about 10,000
employees, the job cuts appear poised to impact about 1,000 workers.
The rate of online shopping is about where data projected it
would be had there not been a pandemic, Lutke told employees.
"Ultimately, placing this bet was my call to make and I
got this wrong," Lutke said.
Shopify provides merchants and creators tools to set up
online shops of their own, with payments, marketing and other features built
into the platform.
From Amazon to social networking star Facebook, US tech
firms that once grew with abandon have reined in hiring to endure tumultuous
times.
Internet giants that saw business boom during the pandemic
have taken a hit from inflation, war, supply chain trouble and people returning
to pre-COVID lifestyles.
Corporate belt-tightening was a common theme as big tech
firms reported earnings from the first three months of this year, and could be
focused on anew as second-quarter earnings are reported in coming days.
Snapchat's owner plans to "substantially" slow
recruitment after bleak results disclosed last week caused the share price to
plummet.
Snap reported that its loss in the recently ended quarter
nearly tripled under conditions "more challenging" than expected.
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