Canadian e-commerce platform Shopify (SHOP) (TSE: SHOP) announced yesterday that it would be laying off 10% of its workforce. At the time of writing, SHOP stock crashed over 17% on the news, but is up 2.7% during pre-market trading. Shopify CEO, Tobi Lütke, penned a heartfelt note on the microblogging site Twitter (TWTR) regarding some of the tough times that forced his hand.
At first, the CEO tweeted that he had to share some sad news with Shopify while attaching a letter to fellow team members. This was followed by the news of the layoff and how difficult the decision was to make and put into words. Notably, Lütke even urged the Twitterati who are currently hiring to contact the placement team at Shopify for referrals of people they were letting go.
Lütke’s tweets were flooded with replies, respecting the man for having the courage to face adversity bravely, while a few ex-employees and recruiters even promised to reach out for help.
Several applauded Lütke for his thoughtful letter and the well-designed severance package. There were also a handful of replies with cynical and sarcastic views.
This gloomy scenario follows an overtly optimistic outlook for Shopify’s platform. Lütke had believed the pandemic-triggered online ordering frenzy will continue even during normal times. He even admitted his incorrect forecasting and over-hiring at Shopify during 2021, which led him to make this tough decision in times of economic duress.
Shopify is not the first and only company to lay off this year. The current macroeconomic headwinds have forced many big and small companies alike to let go of their employees. It’s only natural that companies are trying to cut costs and streamline operations when the future outlook for the economy is so bleak.