Canadian e-commerce platform Shopify laid off about 10 percent of its employees on Tuesday as a pandemic-driven boom in online shopping eased.
The job cuts came as US tech giants are scaling back or even eliminating hiring due to economic conditions battered by inflation and the war in Ukraine.
Most of the layoffs would be in areas unrelated to building products, Shopify CEO Tobias Lutke said in an email to employees the company posted online.
Shopify bolstered its team as online shopping boomed during the pandemic, betting the lifestyle shift would persist even if restrictions were eased, Lutke told workers.
“Now it’s clear that the bet didn’t pay off,” said Lütke. “The next part of the journey will involve fewer teammates than we picked up along the way.”
Based on the company’s previous figures of around 10,000 employees, the job cuts appear to have the potential to affect around 1,000 workers.
The rate of online shopping is about where the data would have projected had there not been a pandemic, Lutke told staffers.
“Ultimately, it was my decision to place that bet and I was wrong,” said Lutke.
Shopify provides merchants and developers with tools to set up their own online stores with payments, marketing, and other features built into the platform.
From Amazon to social networking star Facebook, US tech companies that once grew with devotion have restricted hiring to weather turbulent times.
Internet giants, which have experienced a business boom during the pandemic, have been battered by inflation, war, supply chain problems and people returning to pre-Covid lifestyles.
The tightening of corporate belts has been a common theme as major tech companies reported earnings from the first three months of this year and may refocus when second quarter earnings are reported in the coming days.
The Snapchat owner plans to “significantly” slow down the hiring after dismal results released last week caused the stock price to plummet.
Snap reported that its loss nearly tripled in the recently ended quarter amid conditions that were “more challenging” than expected.
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