Why Shopify Stock Tumbled 12% Today
2022.07.26 17:34
Why Shopify (SHOP) Stock Tumbled 12% Today
By Senad Karaahmetovic
Shares of Shopify (NYSE:SHOP) are down over 12% in premarket Tuesday after Wall Street Journal reported the company is set to lay off 10% of workers as it works to cut its costs.
The DJ report, which cites an internal memo, notes that SHOP is cutting about 1,000 of its global workforce as the company faces rising macro headwinds.
Tobi Lutke, the company’s founder, and CEO, told employees that SHOP’s bet that the surging e-commerce sales growth would continue even after the COVID-19 pandemic “clearly didn’t pay off.”
“Ultimately, placing this bet was my call to make and I got this wrong,” Lutke said in a memo.
Shopify is sizing down across all departments with the recruiting, support, and sales units taking the biggest hit.
“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 added.
Lutke started Shopify 16 years ago and today’s decision marks the first big staff cut the e-commerce company ever announced. Shopify previously saw its global workforce surge from 1,900 in 2016 to roughly 10,000 in 2021.
Shopify stock was already down over 70% YTD.
