Canada’s Shopify Inc is laying off 10% of its workforce, the e-commerce company said on Tuesday, as it struggles with sales growth due to a post-pandemic slowdown in online shopping.
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U.S. listed shares fell 14.7% to $31.29 after the company said it witnessed a pullback in online orders.
Shopify had hit the jackpot during the COVID-19 lockdowns as merchants turned to its platform to set up online stores. As a result, the company ramped up investment on its workforce and technology, betting that the boom would not subside.
However, Chief Executive Officer Tobi Lütke, in a letter addressed to employees, said consumers were now returning to shopping at brick-and-mortar retail stores and online shopping trends have returned to the level they were at before the pandemic began.
“It’s now clear that bet didn’t pay off... Ultimately, placing (it) was my call to make and I got this wrong,” he stated.
Mr. Lütke added that the roles being affected are in recruiting, sales, and support.
With the economy reopening, the company lost its prime spot as Canada’s most valuable company and its shares have lost nearly three quarters of their value so far this year.
The company has tied up with social media firms Twitter and YouTube, as influencers who grew popular online are starting to sell their own brands to offset slowing sales.
