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An employee works at Shopify’s headquarters in Ottawa, Ontario, Canada.
Chris Watty | Reuters
Shopify On Thursday it announced it would cut 20% of its workforce. The news came as you mentioned first quarter earnings It beat analyst estimates on both the top and bottom lines.
Shopify shares are up more than 26% in early trade.
CEO Toby Lutke announce The job is broken down in a note to employees posted on the company’s website. He did not specify which units would be affected as a result of the demobilization.
“I am aware of the crushing effect this decision will have on some of you, and I have not taken this decision lightly,” Lutke wrote.
Shopify had about 11,600 employees and contractors as of December 31, according to Securities deposit.
The cuts mark the second round of layoffs for the Canadian e-commerce company. Shopify last July laid off 10% of its workforce after Lütke said the company miscalculated how long the Covid-fueled e-commerce boom would last.
Lütke said Shopify is ebbing as a company because it is focusing on its core business, which makes tools for companies to sell products online. The company announced separately Thursday that it is offloading its logistics unit to Flexport, a sale that includes Deliverr, the last delivery company it acquired for $2.1 billion last May.
Shopify sell too 6 River Systems, the warehouse robot maker it acquired in 2019 for $450 million, to British retail technology company Ocado. The terms of the Flexport and Ocado deals were not disclosed.
The moves end Shopify’s years-long effort to build its own logistics business. Lütke described the effort as a “worthwhile side endeavor” that could be an independent company in the future, but said Shopify is refocusing its priorities on e-commerce software, as well as newer initiatives like artificial intelligence.
“Shopify has the privilege of being among the companies with the best opportunities to use AI to help our customers,” said Lütke.
Shopify also beat Wall Street estimates for the first quarter. The company reported revenue of $1.51 billion, up 25% from a year earlier, and exceeded expected Wall Street revenue of $1.43 billion, according to Refinitiv.
It reported earnings of 5 cents per share. Excluding items, Shopify earned 1 cent per share, While analysts expected a loss of 4 cents per share. For the year-ago period, Shopify reported a net loss of $1.5 billion, or $1.17 per share, a year ago.
Clarification: This story has been updated to clarify that, excluding items, Shopify earned 1 percent per share, While analysts expected a loss of 4 cents per share.
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