As the online pandemic boom fades, Shopify cuts 1,000 jobs

Category: Business


Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. explosion / ɪkˈsploʊ ʒən / (n.) – a sudden and great increase in the number of something

    The country experienced a population explosion due to the increase of refugees from neighboring countries.

  2. layoff / ˈleɪˌɔf / (n.) – the act of ending a worker’s employment because there’s no more work for them

    The company had several layoffs due to the pandemic.

  3. duplicate / ˈdu plɪ kɪt / (adj.) – being exactly the same as another and serving the same purpose

    The landlord gave me the duplicate key to my apartment.

  4. severance pay / ˈsɛv ər əns peɪ / (n.) – money that is paid to a worker who is forced to stop working because he/she is no longer needed

    The workers who had been laid off were given a huge amount of severance pay.

  5. tenure / ˈtɛn yər / (n.) – a period of time when a person holds a job, office, or title

    He’s respected by his colleagues because of his position and long tenure.


Read the text below.

Shopify is cutting 10% of its staff, or about 1,000 employees, as the e-commerce company reckons with an unexpected sales downturn after a pandemic-fueled explosion.

There has been a wave of layoffs or cutbacks in the tech sector with Wall Street distancing itself from some of the fast-growth companies that flourished over the past two years.

Shares of Shopify Inc., based in Ottawa, Ontario, tumbled 15%.

In a memo sent to employees, Tobias “Tobi” Lütke, the company’s founder and CEO, said job cuts will be made across recruiting, support and sales departments. The company said it’s also eliminating over-specialized and duplicate roles, as well as some groups that were “convenient to have but too far removed from building products.”

The company had anticipated that the pandemic would accelerate the entrenchment of e-commerce sales by five or even 10 years, Lütke wrote, and the company expanded to match those expectations. But he said it’s now clear that bet didn’t pay off. Spending, he said, appears closer to patterns seen before the arrival of COVID-19.

“As a consequence, we have to say goodbye to some of you today and I’m deeply sorry for that,” Lütke wrote.

Shopify was founded in 2006 as a web designer for retailers but has expanded into a suite of services including payments, marketing, and shipping.

Sales leapt 86% between 2019 and 2020, and another 57% jump, to $4.61 billion, last year.

By May, however, Shopify warned of slower revenue growth as the pandemic boom faded.

Employees who are let go will get 16 weeks of severance pay, plus an additional week for every year of tenure, the company said.

The layoffs were first reported by The Wall Street Journal.

This article was provided by The Associated Press.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • Shopify employees who are let go will get 16 weeks of severance pay, plus an additional week for every year of tenure. Do you think this is reasonable? Why or why not? Discuss.
  • If you received a huge sum of severance pay, what would you do with the money? Discuss.

Discussion B

  • In your country, how has COVID-19 affected jobs? Which is more apparent, job losses or the creation of new jobs? Discuss.
  • How do you think companies can avoid duplicate and over-specialized roles in the organization? If these roles already exist in the company, how can the situation be fixed (ex. retrain the staff for other tasks)? Discuss.