Shopify has laid off internal operations staff as the Canadian tech giant shifts to a permanent remote work model, BetaKit has learned.
Approximately 30 to 50 employees were laid off, according to multiple sources with knowledge of the company’s operations, who spoke to BetaKit on condition of anonymity. Roles in internal operations, which focuses on office management and technical maintenance for in-office employees, according to Shopify’s website, were predominantly affected, along with marketing.
A Shopify spokesperson confirmed the cuts to BetaKit, but declined to confirm the number of employees or departments affected. The spokesperson stated that the layoffs affected “a small number of employees,” attributing the decision to Shopify’s shift to a permanent remote work model.
The staff cuts come just shy of three months since Shopify announced its plan to become a “digital by default” company.
“As we move toward a Digital by Design working model, we recently made changes to our team that have impacted a small number of employees,” the spokesperson said. “We remain flexible in our organization and continue to evaluate the roles and skills needed to ensure the strongest and best Shopify possible.”
The staff cuts, while minor compared to Shopify’s more than 5,000 global employee base, come just shy of three months since Shopify announced its plan to become a “digital by default” company. Amid the COVID-19 pandemic, the transition saw the company move the majority of its employees to permanent remote work.
At the time, Shopify began referring to its office spaces as “recruitment hubs.” While the company said it remained committed to having a physical presence in cities across North America, the new label was representative of a radical shift in the company’s belief in the value and use of its real estate.
On its recent Q2 2020 financial call, Shopify CFO Amy Shapero said the company was “exiting” its office locations in some regions. Shapero provided no specifics on which locations, and a spokesperson later told BetaKit that the company is “committed to retaining a physical presence in each major city that we currently have spaces in, which includes Ottawa, Toronto, Waterloo, Montreal, Vancouver as well as locations in New York City, San Francisco, Los Angeles, Stockholm, Vilnius and Berlin.”
As part of its Q2 2020 results, Shopify reported an “impairment charge” of $31.6 million USD due to the shift to permanent remote work. Shapero noted on the call that Shopify was not likely to see savings from the office shutdown for at least a few years. The CFO added that Shopify does not plan to make any further changes to its offices in 2020.
Shopify has reportedly taken advantage of a lease option to claim an additional 90,000 square feet of space in The Well development project, where the company is set to open an additional Toronto location in 2022. Shopify announced the $500 million expansion in 2018 and was originally set to 254,000 square feet.
A Shopify spokesperson told BetaKit in regards to office closures that the workforce shift would not slow the company down from its hiring goals, which include plans to hire 1,000 in British Columbia, over 1,000 in Ontario, “and more.”
As part of its Q2 2020 results, Shopify reported that more merchants joined its platform than ever before, as it pulled in $714.3 million in revenue, a 97 percent year-over-year increase.
The contrast between Shopify’s rapid growth during a global pandemic and the staff reductions today has some former employees BetaKit spoke with feeling cold. Those employees cited certain decisions, such as poor severance packages and the lack of an option to transition to open internal roles like customer service (offered to other employees during the remote work shift), as inconsistent with Shopify’s image as a “culture-first company.”
“Shopify has always been so generous with taking care of their employees,” one laid-off employee told BetaKit.
Those who BetaKit spoke with also said the decision was “shocking” following internal communications at the company after the remote work shift was announced. They referenced multiple employee town halls where Shopify chief talent office Brittany Forsyth reportedly assured attendees that the company was not considering layoffs as part of the transition.
“‘We do not hire based on roles, we hire based on individuals’,” was the message one laid-off employee said was communicated during the town halls. “‘We didn’t hire you for the job that you’re doing, we hired you for you. For the person that you are, because you bring so much to Shopify.’ Okay, If I bring so much to Shopify, where is my offer to step into another role?”
Shopify had not responded to multiple requests for additional comment or clarification regarding the layoffs by time of publication.
UPDATE 12/08/2020: This story has been updated with details regarding reported expansion of Shopify’s office location currently under development in Toronto.