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Shopify to lay off 10% of workers in broad shake-up

508 points by jzig 4y ago

sim7c00 4y ago
makes me think of my home town. built around a steelmill. always jobs being cut for any reasons. hope all those laid off will find a nother good place soon. one that keep them!
lrae 4y ago
Wonder how much money & resources Shopify spent on all of their NFT features & integrations over the last months, how many people worked on it and how many of those are part of the lay-off now. I'd guess the support you'd need to provide for it and their tokengated commerce isn't little either. Tobi removed all the NFT stuff from his Twitter profile and didn't tweet much about it for months now, after being pretty vocal about it until earlier this year. Would love to hear his real thoughts on it and why he/they even (seemingly) invested so much into it. One of the few things I never got about Tobi / Shopify. Just seemed so late and weird to be so bullish there. Don't think he's the kind of person to push it just for personal gain, nor that he'd have to, but ...
- shafyy 4y ago
  I was also disgusted and surprised by the NFT shit Tobi and Shopify pulled (still pull?). But I'd be surprised (again, lol) if they had more then a dozen people working on that stuff.
  - upupandup 4y ago
    wasn't NFT issue but it was a signal. Shopify has some questionable metrics and its marketcap was very iffy as well as its business practices with partners from what I read. spoiler: shopify isn't done yet with layoffs, it will go down as another Canadian failure (lots of those in this country)
    - pxue 4y ago
      SHOP has $8B cash on hand. is a profitable business. how is that anywhere close to the definition of a failed business??
      - upupandup 4y ago
        $6.85B net It's counterparts have far bigger amounts and most of its customer base are affiliate markters, drop shippers.
- ryanSrich 4y ago
  I’m honestly still in disbelief at how many very smart people fell for the NFT trap. If you’ve spent even a single bull cycle in the crypto community you could tell right away NFTs we’re ICO level scams. The mental gymnastics very smart and technical people performed to rationalize paying for a jpeg still makes me question reality. I participate in crypto because I take a calculated risk, and I’m comfortable gambling. People who actually think something like an NFT has any real value still messes with my head. I really can’t grasp how they actually believe this. And yes, I understand technically how NFTs work.
  - MattGaiser 4y ago
    Did they fall for it or did they think they were in on it and applying greater fool theory?
    - ryanSrich 4y ago
      If they truly understood the scam they’d know it doesn’t end where they win. So yes, they actually fell for it because they publicly participated in it.
      - oblio 4y ago
        > If they truly understood the scam they’d know it doesn’t end where they win. Why?
        ryanSrich 4y ago
        Because you don’t make money by selling access to NFTs. You make money by accumulating over hyped projects and then dumping them on bullish retail, knowing full well that in another 12-18 months that same jpeg will be worth nothing in the resale market. Transactions on a few thousand NFTs per day is meaningless (yes volumes that low). So there’s no other option than Shopify actually believing NFTs were a real viable, long term business.
        4y ago
- bhouston 4y ago
  We did some NFT stuff as well. Adding support for NFTs is not that hard to do. Some block chain contracts and some marketing. It definitely didn’t involve significant costs nor the reason for these layoffs. The issue is the market growth that Shopify saw at the beginning of the pandemic is pulling back. And also we are likely entering into a recession which will also hit them. I am surprised they didn’t cut deeper.
  - pbowyer 4y ago
    > And also we are likely entering into a recession which will also hit them. This is a key insight. The Shopify powered shops I buy from are luxury expenditure. The small producers who make nice stuff at high prices. The last couple of months I've been buying significantly less from them as inflation has cut into disposable income and, where I need a product, buying a cheaper alternative from eBay or Amazon. If others have been cutting back extra expenditure like I have, that's going to compound the post-pandemic online shopping slump.
- Entwickler 4y ago
  Nowhere in the article does it mention NFTs being at the heart of the layoffs. The article later says, "The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke". No mention of NFTs, though wouldn't be surprised if they scale back on that. I _would_ be surprised if they drop support and development for them completely.
  - dehrmann 4y ago
    Some companies did work on NFTs because they believe in the space and think it's the next big thing. Some do it for marketing to say "look, we have an NFT story!" If you did it for marketing, there's no reason to advertise you spun down that initiative.
AlwaysRock 4y ago
Part of the reason I got out of recruiting is that recruiting is always part of the first to go. Then a few months from now when Shopify decides it needs to hire again? Recruiting job posts go up like crazy.
- jstummbillig 4y ago
  Losers are not recruiting. It's a "win more" move, statistically. I don't know why it would be a bad idea to pick a career that tilts you toward being on a winning team if you care about the economics.
setgree 4y ago
The article says that Shopify is reeling from a post-pandemic fall in demand that the execs didn't see it coming. But forecasting is hard, and even if they had seen it coming, they probably would have needed to hire broadly anyway. One solution here is to move from 'at will' employment explicit 'tours of service' [0]. If you had hired a bunch of staff in June 2020 under a 2 year contract, with renewal not guaranteed or even expected, you essentially have a built-in mechanism to match employment to the at-home shopping surge. If you had thought the pandemic would just be one year, or three, you could write the contract accordingly. This is probably pretty hard for roles where it takes a while to get up and running, but not so hard for, e.g., sales and operations roles. I personally would appreciate this because every 1-2 years I yearn for a long break. [0] https://forum.effectivealtruism.org/posts/waeDDnaQBTCNNu7hq/ea-tours-of-service https://forum.effectivealtruism.org/posts/waeDDnaQBTCNNu7hq/...
- phpisthebest 4y ago
  >>I personally would appreciate this because every 1-2 years While you would, most of the labor sector would not. For me I explicitly reject fixed term contract employment, while on the surface it may seem more ideal, for me At-will employment through out my career has been pretty stable, and normally on the inside I can tell when layoffs are coming, and what segment so will be impacted so I can plan accordingly
- throwaway5959 4y ago
  Ah yes, let’s make peoples jobs even less secure. Why stop with two years? Why not just have everyone employed weekly and if an algorithm figures out they’re not worthy, off they go?
  - rmahan 4y ago
    That would essentially be at will employment, our current system. “Stopping” at two years is an improvement from our current system because employment (or rather, a salary) would be a guaranteed via a contract. People wouldn’t sign a weekly contract like that if a 2yr contract existed elsewhere
thrownaway561 4y ago
This sucks... There were alot of good people that left github this year and went over to shopify. i pray they don't get laid off.
mkl95 4y ago
Their marketing spin doctors have been preparing for this wave of firings for months, they just wouldn't stop spamming ads bragging about how many people they hire.
intrasight 4y ago
Lately, I see such article titles that paint a 10% layoff as a "shake-up" or use some other doom and gloom language. But in business school I recall learning that a lot of companies have as their standard practice to prune off the lowest performing 10% every year.
- bigtones 4y ago
  That 'fire the bottom 10% rule' was true in the 80's and 90's and was pioneered by Jack Welsh at GE, and notably Microsoft did a similar thing with their 'stack ranking' system. It's a lot less popular in management today because it breeds a divisive and political employee base that is more concerned about saving their own jobs than productively working towards the company's goals.
birdyrooster 4y ago
I’m not going to buy from Shopify if they are going to do mass layoffs.
- TulliusCicero 4y ago
  Their severance looks quite generous. Layoffs aren't great, but it seems like they're handling it responsibly.
  - birdyrooster 4y ago
    That’s not even the bare minimum they should be doing. If it was some democratic process to allow employees to leave voluntarily or vote about the direction of the company explicitly, I would feel differently. These matters shouldn’t be solely in the hands of owners.
ivraatiems 4y ago
I don't have any special love for Shopify, but I think this is one of the best and most empathetic lay-off messages I've seen. No businessspeak, no buzzwords, no nonsense about great journeys. Total clarity about what's going to happen. Very generous and thought-through benefit package that protects those who are leaving. Now, just don't tie those benefits to an NDA, and you'll truly be a company I'd look forward to getting fired from, Shopify.
- s_dev 4y ago
  >Those lines of code started a company and sent it on a fascinating journey full of wonder I looked forward to reading a lay off message without the obligatory "what a journey" message but like that was in the opening paragraph. I'd say the message was fairly standard.
  - ivraatiems 4y ago
    True, but it's one brief paragraph, not more than 50% of the message like we've seen.
- mabbo 4y ago
  Honestly, it's exactly this that made me choose to work here over a higher total comp elsewhere. It's what's kept me even after the stock crashed so hard. Tobi isn't a sociopath. The people he puts at the top aren't sociopaths. They're genuinely nice people, trying their best, and trying to do their best for everyone despite hard situations. It truly is just a book club disguised as a publicly traded company.
  - Valakas_ 4y ago
    There should be sociopathy/narcissim/lack of empathy screenings early in life, and people scored based on it. Based on that jobs would be limited/encouraged. Put sociopaths in jobs where impact is limited.
    - crgwbr 4y ago
skilled 4y ago
Hmm, this statement, "Tobi Lütke, the company’s founder and chief executive, told staff in a memo sent Tuesday that the layoffs are necessary as consumers resume old shopping habits and pull back on the online orders that fueled the company’s recent growth." - sounds a bit bullshitty. But maybe they expected the pandemic to last for the rest of our lives.
- BryanBeshore 4y ago
  Not really. This is the type of statement that would make the stock of the company drop further for the simple reason of being honest, transparent, and truthful.
  - skilled 4y ago
    I don't doubt it. Still strange to hear it. I think a number of the bigger companies tend to hire contractors for these kinds of situations. And the pandemic was/is definitely one of those situations.
- dehrmann 4y ago
  Did you see Walmart's earnings? This is sector-wide.
- clarge1120 4y ago
  Makes sense to me: Shopify is adjusting to market conditions in real time. During lockdowns a lot of people moved their shopping online. When lockdowns lifted some shopping moved offline. Also during lockdowns, lots of people tried their hand at online sales. Some worked, some didn't.
- TulliusCicero 4y ago
  Did you read the article? The CEO admits straight up that he bet on growth, and failed. The letter is actually very direct, with little PR speak. Generous severance benefits too. As far as layoffs go, it's way more responsible than normal.
unicornmama 4y ago
As I mentioned in several other threads over the past months. Companies will do whatever it takes to protect their stock price. Googlers will soon be presented to the chopping block. Top execs are compensated in stock. Almost all turn around and cash out like a revolving door. They will cause hell to protect their upside over the short term.
parkingrift 4y ago
Shopify stock is down 80% over the last 12 months, but their P/E ratio is still 250. I predict more rounds of layoffs for Shopify, and with less generous severance packages. This company is valued as if they are a hyper growth startup, and I just don't see it. Good luck to anyone buying or holding this stock.
- itsoktocry 4y ago
  >This company is valued as if they are a hyper growth startup Agreed. I think Shopify is a great product, but they were huge beneficiaries of the COVID-19 lockdowns and Robinhood culture of 2020/2021 (their only profitable years?).
  - jesterson 4y ago
    Wonder what makes you think of Shopify as a great product? I work with it on quite a high level position and everything about it is plainly terrible: support (terrible, only few people that care can help), management (many promises - zero delivery), tech side (team is suffering from ways their API works).
- adventured 4y ago
  They're this era's Nortel (Canada has a primo bubble stock with each big run; during the housing bubble era it was Blackberry). There's very little that is special about their business. They have no great competitive moat. It hasn't even demonstrated good margins ala an eBay. The hype started with Amazon's stock liftoff, which was overwhelmingly due to AWS not retail. Investors went looking for the next Amazon in ecommerce and foolishly bought into the premise that Shopify would be that. Now all the bubbly ecommerce valuations are collapsing, as they should. Stocks like Etsy and Fiverr still need cut in half again at a minimum. Shopify is worth three to four times sales at most. Compress that further as their growth slows. The stock will stagnate for at least a decade vs the highs it hit during this bubble.
  - parkingrift 4y ago
    I mostly agree. I personally think Shopify should be valued at around $3-5 billion at most.
jrochkind1 4y ago
They're still listing open positions for lots of engineering jobs, it kind of seems like for all the engineering jobs... https://www.shopify.com/careers/search https://www.shopify.com/careers/search Curious if anyone with more context knows how to interpret that. The obvious one is that they didn't lay off and are still hiring like mad for engineering, but I don't know if that's the right read. Or they just haven't updated their job postings. Or they actually have fewer engineering positions open than they used to even though it looks like a lot -- most of these positions actually maybe look like "tech lead" positions; it doesn't look like there are any/many standard/non-senior engineer positions open, and I think maybe there were a few weeks ago? Not sure.
- eddieroger 4y ago
  I have no knowledge of the situation and don't work for Shopify, but having worked corporate gigs my whole life, what probably happened is very few people knew this was coming, and that group excluded the part of HR that hires people. So the posting remain up while the news comes out, but the roles don't get filled and the postings eventually removed.
notyourday 4y ago
Maybe they could assign some remaining people to fixing their god damn issue with ERR_INVALID_RESPONSE issue with Chrome that has been happening on and off for years
deleted 4y ago
[deleted]
helloworld11 4y ago
https://archive.ph/FAWFt https://archive.ph/FAWFt
eatonphil 4y ago
It wasn't clear from the article or comments but they've let go engineers too. https://mobile.twitter.com/joeldrapper/status/1551940500814430208 https://mobile.twitter.com/joeldrapper/status/15519405008144...
tiffanyh 4y ago
I wonder if Deliverr.com will be impacted, given Shopify closed that acquisitions just 2 weeks ago. https://news.shopify.com/shopify-completes-acquisition-of-deliverr-to-expand-fast-and-easy-fulfillment-for-merchants-across-multiple-channels https://news.shopify.com/shopify-completes-acquisition-of-de...
HeyItsMatt 4y ago
This is the only time that it is correct for a journalist to use the word "decimate".
bithavoc 4y ago
They’re laying off core engineers too https://twitter.com/joeldrapper/status/1551940500814430208?s=21&t=v9zhEXLioMLtFvRStoSNbg https://twitter.com/joeldrapper/status/1551940500814430208?s...
c0balt 4y ago
For people more interested in a snapshot: https://archive.ph/q04Hb https://archive.ph/q04Hb
mattbrewsbytes 4y ago
The bit that is viewable in the paywalled article indicates 1000 people will be let go and their revenues are forecasted to shrink as people go back to pre-pandemic shopping habits. I believe they were on a hiring binge last year to get 2000+ engineers. Any indication if the layoffs are just engineering or across the board?
- tempest_ 4y ago
  Further down in the article it says the following "The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke. “We’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products,” he wrote. Staff who are being let go will be notified on Tuesday."
- sarchertech 4y ago
  The article indicates that the layouts aren’t engineering.
- soneca 4y ago
  As the large majority (if not all) of this year layoffs in tech companies, engineering is barely affected. > ”The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke.”
  - spamizbad 4y ago
    Lots of rescinded offers and hiring freezes though. Seems like they’re hoping for some natural shrinking to avoid pricey severances.
    - boringg 4y ago
      edit: Re-read the thread somehow missed that it was specific to engineering. Comment makes sense - engineering typically last to go for obvious reasons. I'll counter though that I don't think its about pricey severances but more related to keep core products operating and being built for the future. Lutke comes from software engineering.
saos 4y ago
> Shopify’s workforce has increased from 1,900 in 2016 to roughly 10,000 in 2021 That’s pretty insane growth. No wonder What are the safest industries in tech right now? Feel like it’s gonna get worse
- pastor_bob 4y ago
  The only industry I wouldn't want to be in now is Crypto. Everything else, it's just a blip. Upward and onward. Be greedy when others are fearful etc
  - spaceman_2020 4y ago
    Ironically, crypto VCs are sitting on a lot of dry powder and the narrative is much stronger (WEB3! METAVERSE!) since it is completely detached from reality. In situations like these where the wealthy still have a ton of money, it is far better to be in a business that a) the wealthy don't understand, and b) is so outlandish that you can't assign a hard value to it. If you make $1 in profit, then investors can assign it a hard value (10-15x ARR). If you make $0 in profit, then investors can spin up narratives about your "potential".
  - MangoCoffee 4y ago
    start up is probably not a good place to be. if Peter Zeihan is right about population and boomers. our world is shrinking with less young people for consumption, boomers retiring and taking their money to less risky investment. the money that prop up start up could be dry pretty soon.
    - toomuchtodo 4y ago
      Healthcare, energy, government should be safe. I spent a year at a DOE lab during an economic crisis. The pay sucked but the checks cleared.
      - ghaff 4y ago
        >The pay sucked but the checks cleared. That's really the calculation people need to make. At a large tech employer? How are they doing? Is what you're working on strategic? Do you seem to be valued or are you maybe a bit on the bubble? Depending on the answers, it may make sense to stay put or it may make sense to find a life raft even if it isn't as cushy in some ways as where you are. And, as someone else noted, industries aren't homogeneous. Individual employers matter.
FinanceAnon 4y ago
What I don't get about these lay-offs, is that these companies usually start hiring again soon after
- rr888 4y ago
  Often these 10% layoffs are an excuse to get rid of people that are overpaid, aren't performing or dont fit very well in the organization. Some companies do it every year.
  - cpach 4y ago
    Indeed. For some companies it’s par for the course.
    - onion2k 4y ago
      When you decide that hiring good people is actually a hard problem the most obvious solution is to stop trying, and just accept some bad hires in the org temporarily that you'll let go in the next round of cuts if they don't work out. This actually works out fairly well for everyone - some people get hired and stay because they're good, some get hired and then dropped but they earn well and get a big name on their resume for their time, and the company eventually builds a stronger team.
      - MonkeyMalarky 4y ago
        It certainly solves missing good people due to false-negatives during hiring.
        marcosdumay 4y ago
        Yep. People complain about social strata discrimination, leetcode interviews, blatant racism and sexism on hiring... Well, any real solution to those requires accepting a few bad hires and dealing with them later. Otherwise people will always go into voodoo practices trying to avoid the inevitable failures.
newaccount2021 4y ago
senttoschool 4y ago
How did they lose $1.47B on $1.2B revenue last quarter? Wow. Personally, I haven't bought a single item from a Shopify store. I prefer Amazon because of prime shipping, reviews, and the ability to compare similar products with one single search.
- tempsy 4y ago
  lol Amazon is now more like Ebay than a store with their own inventory, as in the majority of sales come from shady third party marketplace vendors. If you think it’s safer it’s most likely because they’ve gotten very good at rigging reviews.
  - Pxtl 4y ago
    Amazon is AliExpress with faster shipping.
    - marcosdumay 4y ago
      AliExpress allows you to select who you are buying from. Not allowing that is my one problem with Amazon.
- system16 4y ago
  I called it quits with Amazon after my last three orders: - Received a clearly counterfeit product (not even a good attempt at a fake) - Received a product that looked nothing like the description with a note included offering me a $10 Amazon Gift card for providing proof of giving the seller a 5 star review. I reported this to Amazon and no action was taken. - My last order, the product never even arrived. No response from the seller despite repeated attempts. (In Amazon's defence, a refund was quick and painless once the 2 week waiting period ended) In all of these cases, the sellers had thousands of 5 star reviews. I feel a turning point will come where Amazon will either have to do some major housecleaning to fix the gaming / fake reviews, scams, and counterfeit products that infest their entire business, or customers will reach a breaking point and leave en-masse.
- wadely 4y ago
pastor_bob 4y ago
They clearly made a bet to try and become Amazon-esque that hasn't paid off and has been costly. To blame 'unforeseen' waning pandemic growth seems like a copout by management (not surprising)
- onlyrealcuzzo 4y ago
  In business, optimism usually wins over pessimism - but reality always settles the account.
  - sim7c00 4y ago
    optimisim wins over pessimism, right up to the point the ship sinks. somewhere in the middle is likely the way forward.
    - onlyrealcuzzo 4y ago
      Pessimistic people don't get promoted, even when they're right. It's just better to be a hyper bull and optimistic and get lucky and be right.
    - marcinzm 4y ago
      From a business perspective layoffs aren't the ship sinking but simply adjusting heading.
MEMORYC_RRUPTED 4y ago
There’s more information available in the full email by Tobi (the CEO): https://news.shopify.com/changes-to-shopifys-team https://news.shopify.com/changes-to-shopifys-team
- dayvid 4y ago
  "Most of the impacted roles are in recruiting, support, and sales, and across the company we’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products." Important to keep in mind that engineering roles may not be as affected as other departments.
  - neon_electro 4y ago
    About to find out personally! (applying to Shopify for an eng role as of this comment)
- achow 4y ago
  16 weeks of severance pay. Additional week for every year of tenure at Shopify. No Equity cliff. Medical benefits (for 16 weeks?). Internet costs reimbursement (16 weeks?). Get to keep home office furniture. Kickstart allowance that can be used to buy new laptops. Outplacement services. Free Shopify account those who wants to start on their own.
  - ransom1538 4y ago
    I have been at startups where they just stop paying the office lease and salaries stop. These days i am just prepared for it. If you are in the backend side of things you can figure out most things with a few sql queries.
    - wing-_-nuts 4y ago
      > If you are in the backend side of things you can figure out most things with a few sql queries. Expand on this? You querying the prod db to sus out the health of the company?

508 points by jzig 4y ago

makes me think of my home town. built around a steelmill. always jobs being cut for any reasons. hope all those laid off will find a nother good place soon. one that keep them!

lrae 4y ago

Wonder how much money & resources Shopify spent on all of their NFT features & integrations over the last months, how many people worked on it and how many of those are part of the lay-off now. I'd guess the support you'd need to provide for it and their tokengated commerce isn't little either. Tobi removed all the NFT stuff from his Twitter profile and didn't tweet much about it for months now, after being pretty vocal about it until earlier this year. Would love to hear his real thoughts on it and why he/they even (seemingly) invested so much into it. One of the few things I never got about Tobi / Shopify. Just seemed so late and weird to be so bullish there. Don't think he's the kind of person to push it just for personal gain, nor that he'd have to, but ...

shafyy 4y ago
I was also disgusted and surprised by the NFT shit Tobi and Shopify pulled (still pull?). But I'd be surprised (again, lol) if they had more then a dozen people working on that stuff.
- upupandup 4y ago
  wasn't NFT issue but it was a signal. Shopify has some questionable metrics and its marketcap was very iffy as well as its business practices with partners from what I read. spoiler: shopify isn't done yet with layoffs, it will go down as another Canadian failure (lots of those in this country)
  - pxue 4y ago
    SHOP has $8B cash on hand. is a profitable business. how is that anywhere close to the definition of a failed business??
    - upupandup 4y ago
      $6.85B net It's counterparts have far bigger amounts and most of its customer base are affiliate markters, drop shippers.
ryanSrich 4y ago
I’m honestly still in disbelief at how many very smart people fell for the NFT trap. If you’ve spent even a single bull cycle in the crypto community you could tell right away NFTs we’re ICO level scams. The mental gymnastics very smart and technical people performed to rationalize paying for a jpeg still makes me question reality. I participate in crypto because I take a calculated risk, and I’m comfortable gambling. People who actually think something like an NFT has any real value still messes with my head. I really can’t grasp how they actually believe this. And yes, I understand technically how NFTs work.
- MattGaiser 4y ago
  Did they fall for it or did they think they were in on it and applying greater fool theory?
  - ryanSrich 4y ago
    If they truly understood the scam they’d know it doesn’t end where they win. So yes, they actually fell for it because they publicly participated in it.
    - oblio 4y ago
      > If they truly understood the scam they’d know it doesn’t end where they win. Why?
      - ryanSrich 4y ago
        Because you don’t make money by selling access to NFTs. You make money by accumulating over hyped projects and then dumping them on bullish retail, knowing full well that in another 12-18 months that same jpeg will be worth nothing in the resale market. Transactions on a few thousand NFTs per day is meaningless (yes volumes that low). So there’s no other option than Shopify actually believing NFTs were a real viable, long term business.
        4y ago
bhouston 4y ago
We did some NFT stuff as well. Adding support for NFTs is not that hard to do. Some block chain contracts and some marketing. It definitely didn’t involve significant costs nor the reason for these layoffs. The issue is the market growth that Shopify saw at the beginning of the pandemic is pulling back. And also we are likely entering into a recession which will also hit them. I am surprised they didn’t cut deeper.
- pbowyer 4y ago
  > And also we are likely entering into a recession which will also hit them. This is a key insight. The Shopify powered shops I buy from are luxury expenditure. The small producers who make nice stuff at high prices. The last couple of months I've been buying significantly less from them as inflation has cut into disposable income and, where I need a product, buying a cheaper alternative from eBay or Amazon. If others have been cutting back extra expenditure like I have, that's going to compound the post-pandemic online shopping slump.
Entwickler 4y ago
Nowhere in the article does it mention NFTs being at the heart of the layoffs. The article later says, "The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke". No mention of NFTs, though wouldn't be surprised if they scale back on that. I _would_ be surprised if they drop support and development for them completely.
- dehrmann 4y ago
  Some companies did work on NFTs because they believe in the space and think it's the next big thing. Some do it for marketing to say "look, we have an NFT story!" If you did it for marketing, there's no reason to advertise you spun down that initiative.

AlwaysRock 4y ago

Part of the reason I got out of recruiting is that recruiting is always part of the first to go. Then a few months from now when Shopify decides it needs to hire again? Recruiting job posts go up like crazy.

jstummbillig 4y ago
Losers are not recruiting. It's a "win more" move, statistically. I don't know why it would be a bad idea to pick a career that tilts you toward being on a winning team if you care about the economics.

setgree 4y ago

The article says that Shopify is reeling from a post-pandemic fall in demand that the execs didn't see it coming. But forecasting is hard, and even if they had seen it coming, they probably would have needed to hire broadly anyway. One solution here is to move from 'at will' employment explicit 'tours of service' [0]. If you had hired a bunch of staff in June 2020 under a 2 year contract, with renewal not guaranteed or even expected, you essentially have a built-in mechanism to match employment to the at-home shopping surge. If you had thought the pandemic would just be one year, or three, you could write the contract accordingly. This is probably pretty hard for roles where it takes a while to get up and running, but not so hard for, e.g., sales and operations roles. I personally would appreciate this because every 1-2 years I yearn for a long break. [0] https://forum.effectivealtruism.org/posts/waeDDnaQBTCNNu7hq/ea-tours-of-service https://forum.effectivealtruism.org/posts/waeDDnaQBTCNNu7hq/...

phpisthebest 4y ago
>>I personally would appreciate this because every 1-2 years While you would, most of the labor sector would not. For me I explicitly reject fixed term contract employment, while on the surface it may seem more ideal, for me At-will employment through out my career has been pretty stable, and normally on the inside I can tell when layoffs are coming, and what segment so will be impacted so I can plan accordingly
throwaway5959 4y ago
Ah yes, let’s make peoples jobs even less secure. Why stop with two years? Why not just have everyone employed weekly and if an algorithm figures out they’re not worthy, off they go?
- rmahan 4y ago
  That would essentially be at will employment, our current system. “Stopping” at two years is an improvement from our current system because employment (or rather, a salary) would be a guaranteed via a contract. People wouldn’t sign a weekly contract like that if a 2yr contract existed elsewhere

thrownaway561 4y ago

This sucks... There were alot of good people that left github this year and went over to shopify. i pray they don't get laid off.

mkl95 4y ago

Their marketing spin doctors have been preparing for this wave of firings for months, they just wouldn't stop spamming ads bragging about how many people they hire.

intrasight 4y ago

Lately, I see such article titles that paint a 10% layoff as a "shake-up" or use some other doom and gloom language. But in business school I recall learning that a lot of companies have as their standard practice to prune off the lowest performing 10% every year.

bigtones 4y ago
That 'fire the bottom 10% rule' was true in the 80's and 90's and was pioneered by Jack Welsh at GE, and notably Microsoft did a similar thing with their 'stack ranking' system. It's a lot less popular in management today because it breeds a divisive and political employee base that is more concerned about saving their own jobs than productively working towards the company's goals.

birdyrooster 4y ago

I’m not going to buy from Shopify if they are going to do mass layoffs.

TulliusCicero 4y ago
Their severance looks quite generous. Layoffs aren't great, but it seems like they're handling it responsibly.
- birdyrooster 4y ago
  That’s not even the bare minimum they should be doing. If it was some democratic process to allow employees to leave voluntarily or vote about the direction of the company explicitly, I would feel differently. These matters shouldn’t be solely in the hands of owners.

ivraatiems 4y ago

I don't have any special love for Shopify, but I think this is one of the best and most empathetic lay-off messages I've seen. No businessspeak, no buzzwords, no nonsense about great journeys. Total clarity about what's going to happen. Very generous and thought-through benefit package that protects those who are leaving. Now, just don't tie those benefits to an NDA, and you'll truly be a company I'd look forward to getting fired from, Shopify.

s_dev 4y ago
>Those lines of code started a company and sent it on a fascinating journey full of wonder I looked forward to reading a lay off message without the obligatory "what a journey" message but like that was in the opening paragraph. I'd say the message was fairly standard.
- ivraatiems 4y ago
  True, but it's one brief paragraph, not more than 50% of the message like we've seen.
mabbo 4y ago
Honestly, it's exactly this that made me choose to work here over a higher total comp elsewhere. It's what's kept me even after the stock crashed so hard. Tobi isn't a sociopath. The people he puts at the top aren't sociopaths. They're genuinely nice people, trying their best, and trying to do their best for everyone despite hard situations. It truly is just a book club disguised as a publicly traded company.
- Valakas_ 4y ago
  There should be sociopathy/narcissim/lack of empathy screenings early in life, and people scored based on it. Based on that jobs would be limited/encouraged. Put sociopaths in jobs where impact is limited.
  - crgwbr 4y ago

skilled 4y ago

Hmm, this statement, "Tobi Lütke, the company’s founder and chief executive, told staff in a memo sent Tuesday that the layoffs are necessary as consumers resume old shopping habits and pull back on the online orders that fueled the company’s recent growth." - sounds a bit bullshitty. But maybe they expected the pandemic to last for the rest of our lives.

BryanBeshore 4y ago
Not really. This is the type of statement that would make the stock of the company drop further for the simple reason of being honest, transparent, and truthful.
- skilled 4y ago
  I don't doubt it. Still strange to hear it. I think a number of the bigger companies tend to hire contractors for these kinds of situations. And the pandemic was/is definitely one of those situations.
dehrmann 4y ago
Did you see Walmart's earnings? This is sector-wide.
clarge1120 4y ago
Makes sense to me: Shopify is adjusting to market conditions in real time. During lockdowns a lot of people moved their shopping online. When lockdowns lifted some shopping moved offline. Also during lockdowns, lots of people tried their hand at online sales. Some worked, some didn't.
TulliusCicero 4y ago
Did you read the article? The CEO admits straight up that he bet on growth, and failed. The letter is actually very direct, with little PR speak. Generous severance benefits too. As far as layoffs go, it's way more responsible than normal.

unicornmama 4y ago

As I mentioned in several other threads over the past months. Companies will do whatever it takes to protect their stock price. Googlers will soon be presented to the chopping block. Top execs are compensated in stock. Almost all turn around and cash out like a revolving door. They will cause hell to protect their upside over the short term.

parkingrift 4y ago

Shopify stock is down 80% over the last 12 months, but their P/E ratio is still 250. I predict more rounds of layoffs for Shopify, and with less generous severance packages. This company is valued as if they are a hyper growth startup, and I just don't see it. Good luck to anyone buying or holding this stock.

itsoktocry 4y ago
>This company is valued as if they are a hyper growth startup Agreed. I think Shopify is a great product, but they were huge beneficiaries of the COVID-19 lockdowns and Robinhood culture of 2020/2021 (their only profitable years?).
- jesterson 4y ago
  Wonder what makes you think of Shopify as a great product? I work with it on quite a high level position and everything about it is plainly terrible: support (terrible, only few people that care can help), management (many promises - zero delivery), tech side (team is suffering from ways their API works).
adventured 4y ago
They're this era's Nortel (Canada has a primo bubble stock with each big run; during the housing bubble era it was Blackberry). There's very little that is special about their business. They have no great competitive moat. It hasn't even demonstrated good margins ala an eBay. The hype started with Amazon's stock liftoff, which was overwhelmingly due to AWS not retail. Investors went looking for the next Amazon in ecommerce and foolishly bought into the premise that Shopify would be that. Now all the bubbly ecommerce valuations are collapsing, as they should. Stocks like Etsy and Fiverr still need cut in half again at a minimum. Shopify is worth three to four times sales at most. Compress that further as their growth slows. The stock will stagnate for at least a decade vs the highs it hit during this bubble.
- parkingrift 4y ago
  I mostly agree. I personally think Shopify should be valued at around $3-5 billion at most.

jrochkind1 4y ago

They're still listing open positions for lots of engineering jobs, it kind of seems like for all the engineering jobs... https://www.shopify.com/careers/search https://www.shopify.com/careers/search Curious if anyone with more context knows how to interpret that. The obvious one is that they didn't lay off and are still hiring like mad for engineering, but I don't know if that's the right read. Or they just haven't updated their job postings. Or they actually have fewer engineering positions open than they used to even though it looks like a lot -- most of these positions actually maybe look like "tech lead" positions; it doesn't look like there are any/many standard/non-senior engineer positions open, and I think maybe there were a few weeks ago? Not sure.

eddieroger 4y ago
I have no knowledge of the situation and don't work for Shopify, but having worked corporate gigs my whole life, what probably happened is very few people knew this was coming, and that group excluded the part of HR that hires people. So the posting remain up while the news comes out, but the roles don't get filled and the postings eventually removed.

notyourday 4y ago

Maybe they could assign some remaining people to fixing their god damn issue with ERR_INVALID_RESPONSE issue with Chrome that has been happening on and off for years

deleted 4y ago

[deleted]

helloworld11 4y ago

https://archive.ph/FAWFt https://archive.ph/FAWFt

eatonphil 4y ago

It wasn't clear from the article or comments but they've let go engineers too. https://mobile.twitter.com/joeldrapper/status/1551940500814430208 https://mobile.twitter.com/joeldrapper/status/15519405008144...

tiffanyh 4y ago

I wonder if Deliverr.com will be impacted, given Shopify closed that acquisitions just 2 weeks ago. https://news.shopify.com/shopify-completes-acquisition-of-deliverr-to-expand-fast-and-easy-fulfillment-for-merchants-across-multiple-channels https://news.shopify.com/shopify-completes-acquisition-of-de...

HeyItsMatt 4y ago

This is the only time that it is correct for a journalist to use the word "decimate".

bithavoc 4y ago

They’re laying off core engineers too https://twitter.com/joeldrapper/status/1551940500814430208?s=21&t=v9zhEXLioMLtFvRStoSNbg https://twitter.com/joeldrapper/status/1551940500814430208?s...

c0balt 4y ago

For people more interested in a snapshot: https://archive.ph/q04Hb https://archive.ph/q04Hb

mattbrewsbytes 4y ago

The bit that is viewable in the paywalled article indicates 1000 people will be let go and their revenues are forecasted to shrink as people go back to pre-pandemic shopping habits. I believe they were on a hiring binge last year to get 2000+ engineers. Any indication if the layoffs are just engineering or across the board?

tempest_ 4y ago
Further down in the article it says the following "The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke. “We’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products,” he wrote. Staff who are being let go will be notified on Tuesday."
sarchertech 4y ago
The article indicates that the layouts aren’t engineering.
soneca 4y ago
As the large majority (if not all) of this year layoffs in tech companies, engineering is barely affected. > ”The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke.”
- spamizbad 4y ago
  Lots of rescinded offers and hiring freezes though. Seems like they’re hoping for some natural shrinking to avoid pricey severances.
  - boringg 4y ago
    edit: Re-read the thread somehow missed that it was specific to engineering. Comment makes sense - engineering typically last to go for obvious reasons. I'll counter though that I don't think its about pricey severances but more related to keep core products operating and being built for the future. Lutke comes from software engineering.

saos 4y ago

> Shopify’s workforce has increased from 1,900 in 2016 to roughly 10,000 in 2021 That’s pretty insane growth. No wonder What are the safest industries in tech right now? Feel like it’s gonna get worse

pastor_bob 4y ago
The only industry I wouldn't want to be in now is Crypto. Everything else, it's just a blip. Upward and onward. Be greedy when others are fearful etc
- spaceman_2020 4y ago
  Ironically, crypto VCs are sitting on a lot of dry powder and the narrative is much stronger (WEB3! METAVERSE!) since it is completely detached from reality. In situations like these where the wealthy still have a ton of money, it is far better to be in a business that a) the wealthy don't understand, and b) is so outlandish that you can't assign a hard value to it. If you make $1 in profit, then investors can assign it a hard value (10-15x ARR). If you make $0 in profit, then investors can spin up narratives about your "potential".
- MangoCoffee 4y ago
  start up is probably not a good place to be. if Peter Zeihan is right about population and boomers. our world is shrinking with less young people for consumption, boomers retiring and taking their money to less risky investment. the money that prop up start up could be dry pretty soon.
  - toomuchtodo 4y ago
    Healthcare, energy, government should be safe. I spent a year at a DOE lab during an economic crisis. The pay sucked but the checks cleared.
    - ghaff 4y ago
      >The pay sucked but the checks cleared. That's really the calculation people need to make. At a large tech employer? How are they doing? Is what you're working on strategic? Do you seem to be valued or are you maybe a bit on the bubble? Depending on the answers, it may make sense to stay put or it may make sense to find a life raft even if it isn't as cushy in some ways as where you are. And, as someone else noted, industries aren't homogeneous. Individual employers matter.

FinanceAnon 4y ago

What I don't get about these lay-offs, is that these companies usually start hiring again soon after

rr888 4y ago
Often these 10% layoffs are an excuse to get rid of people that are overpaid, aren't performing or dont fit very well in the organization. Some companies do it every year.
- cpach 4y ago
  Indeed. For some companies it’s par for the course.
  - onion2k 4y ago
    When you decide that hiring good people is actually a hard problem the most obvious solution is to stop trying, and just accept some bad hires in the org temporarily that you'll let go in the next round of cuts if they don't work out. This actually works out fairly well for everyone - some people get hired and stay because they're good, some get hired and then dropped but they earn well and get a big name on their resume for their time, and the company eventually builds a stronger team.
    - MonkeyMalarky 4y ago
      It certainly solves missing good people due to false-negatives during hiring.
      - marcosdumay 4y ago
        Yep. People complain about social strata discrimination, leetcode interviews, blatant racism and sexism on hiring... Well, any real solution to those requires accepting a few bad hires and dealing with them later. Otherwise people will always go into voodoo practices trying to avoid the inevitable failures.

newaccount2021 4y ago

senttoschool 4y ago

How did they lose $1.47B on $1.2B revenue last quarter? Wow. Personally, I haven't bought a single item from a Shopify store. I prefer Amazon because of prime shipping, reviews, and the ability to compare similar products with one single search.

tempsy 4y ago
lol Amazon is now more like Ebay than a store with their own inventory, as in the majority of sales come from shady third party marketplace vendors. If you think it’s safer it’s most likely because they’ve gotten very good at rigging reviews.
- Pxtl 4y ago
  Amazon is AliExpress with faster shipping.
  - marcosdumay 4y ago
    AliExpress allows you to select who you are buying from. Not allowing that is my one problem with Amazon.
system16 4y ago
I called it quits with Amazon after my last three orders: - Received a clearly counterfeit product (not even a good attempt at a fake) - Received a product that looked nothing like the description with a note included offering me a $10 Amazon Gift card for providing proof of giving the seller a 5 star review. I reported this to Amazon and no action was taken. - My last order, the product never even arrived. No response from the seller despite repeated attempts. (In Amazon's defence, a refund was quick and painless once the 2 week waiting period ended) In all of these cases, the sellers had thousands of 5 star reviews. I feel a turning point will come where Amazon will either have to do some major housecleaning to fix the gaming / fake reviews, scams, and counterfeit products that infest their entire business, or customers will reach a breaking point and leave en-masse.
wadely 4y ago

pastor_bob 4y ago

They clearly made a bet to try and become Amazon-esque that hasn't paid off and has been costly. To blame 'unforeseen' waning pandemic growth seems like a copout by management (not surprising)

onlyrealcuzzo 4y ago
In business, optimism usually wins over pessimism - but reality always settles the account.
- sim7c00 4y ago
  optimisim wins over pessimism, right up to the point the ship sinks. somewhere in the middle is likely the way forward.
  - onlyrealcuzzo 4y ago
    Pessimistic people don't get promoted, even when they're right. It's just better to be a hyper bull and optimistic and get lucky and be right.
  - marcinzm 4y ago
    From a business perspective layoffs aren't the ship sinking but simply adjusting heading.

MEMORYC_RRUPTED 4y ago

There’s more information available in the full email by Tobi (the CEO): https://news.shopify.com/changes-to-shopifys-team https://news.shopify.com/changes-to-shopifys-team

dayvid 4y ago
"Most of the impacted roles are in recruiting, support, and sales, and across the company we’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products." Important to keep in mind that engineering roles may not be as affected as other departments.
- neon_electro 4y ago
  About to find out personally! (applying to Shopify for an eng role as of this comment)
achow 4y ago
16 weeks of severance pay. Additional week for every year of tenure at Shopify. No Equity cliff. Medical benefits (for 16 weeks?). Internet costs reimbursement (16 weeks?). Get to keep home office furniture. Kickstart allowance that can be used to buy new laptops. Outplacement services. Free Shopify account those who wants to start on their own.
- ransom1538 4y ago
  I have been at startups where they just stop paying the office lease and salaries stop. These days i am just prepared for it. If you are in the backend side of things you can figure out most things with a few sql queries.
  - wing-_-nuts 4y ago
    > If you are in the backend side of things you can figure out most things with a few sql queries. Expand on this? You querying the prod db to sus out the health of the company?