Shopify swaps CFO, COO amid financial downturn

CFO to exit following third quarter earnings report.

E-commerce giant Shopify is shuffling its C-suite even as it continues to deal with the economic downturn and continued layoffs.

Amy Shapero, the company’s CFO of five years, will step down following Shopify’s third quarter 2022 earnings announcement on October 27. Jeff Hoffmeister will take over as CFO.

Hoffmeister will join Shopify from Morgan Stanley, where he spent over two decades in its technology investment banking group.

As well, the company announced that Kaz Nejatian, vice president of product, will succeed Toby Shannan as COO, effective immediately.

Shannan is retiring from his role at Shopify and is expected to join the board of directors as of January 1, 2023. Until the end of the year, he will serve as a special advisor.

Nejatian will remain as the VP of product while taking on the role of COO.

RELATED: Shopify’s Q2 2022 growth continued to slow amid changing e-commerce market conditions

The changes come during a turbulent time for the company. The Globe and Mail reported last week that Shopify laid off another 70 employees, following an earlier reduction of 10 percent in overall staffing in July that impacted approximately 1,000 employees.

Shopify spokesperson Jackie Warren previously disputed The Globe’s report of layoffs, telling BetaKit that “the number reported by The Globe and Mail on September 1 is grossly overestimated,” but did not disclose the exact amount of employees impacted by the layoffs, noting that “details around individual employee departures are confidential.”

One thing that is not in dispute, however, is the company’s financials, which like many large tech companies have slowed in the current sluggish economy.

Shopify posted its financial results for the second quarter of 2022 in late July, pulling in $1.3 billion (all numbers USD) as the company’s growth continued to slow amid changing e-commerce conditions.

The revenue number represents just a 16 percent year-over-year increase, a much smaller increase compared to the COVID-19 e-commerce boom of recent years.

Shopify reported a net loss for the second quarter of $1.2 billion compared with a net income of around $900,000 million during the same period last year.

Given that Shapero is stepping down immediately following the third quarter earnings announcement, it’s not expected that the e-commerce company will post robust results.

As well, Shopify took a $40 million USD hit in early September after a United States (US) federal jury awarded California-based Express Mobile a lump sum in damages following the finding that Shopify’s website-building tools infringe some of the American company’s patents.

In a verdict filed earlier this week, a Delaware, US jury has decided that the Ottawa-based e-commerce giant’s tech infringes upon three patents held by Express Mobile related to software for providing content to mobile devices.

RELATED: Partnership with Mailchimp competitor Klaviyo marks Shopify’s second strategic investment in recent weeks

In relation to Shapero, Shopify president Harley Finkelstein hailed her in a Tweet on Thursday, noting that “very few CFOs have been at the helm of such astronomical growth as Amy Shapero who saw us grow from $673M revenue in 2018 to $4.6B in 2021. Thank you to Amy for everything you’ve done.”

Hoffmeister, Shapero’s replacement, held various finance, auditing and M&A roles at other companies, including PricewaterhouseCoopers before joining Morgan Stanley.

According to Shopify, Hoffmeister has significant experience leading high-profile tech companies in a variety of transactions, including initial public offerings, follow-on offerings, convertible notes, equity and debt financings and M&A transactions. He helped lead IPOs for dozens of companies, including Shopify, which worked with Morgan Stanley for its IPO.

Hoffmeister is a graduate of Georgetown University with a Bachelor of Science in Business Administration and has a Master in Business Administration from the University of Virginia Darden School of Business. He also holds a license as a certified public accountant (CPA).

For his part, Nejatian has been viewed as a polarizing figure within Shopify. An October 2021 tweet from Nejatian that touted the need for stronger work ethics garnered negative responses from people within and outside of Shopify about the need for work-life balance.

As VP of product, Nejatian has led a cross-functional team that develops and delivers tools for entrepreneurs to supercharge their growth on Shopify.

After working as a lawyer in his early career, Nejatian co-founded and served as the CEO of Kash, a payment technology company. Nejatian then served as product lead for payments and billing at Facebook. Nejatian is a graduate of Queen’s University’s School of Business and the University of Toronto Faculty of Law.

Shopify CEO Tobi Lütke called Nejatian “the right person to succeed Toby Shannan in the Chief Operating Officer role” given what he called a strong leadership around innovation and product strategy. Lütke also thanked Shapero for her time at Shopify, noting she was “invaluable as we scaled our finance function during a period of rapid growth for Shopify.”

Charles Mandel

Charles Mandel

Charles Mandel's reporting and writing on technology has appeared in, Canadian Business, Report on Business Magazine, Canada's National Observer, The Globe and Mail, and the National Post, among many others. He lives off-grid in Nova Scotia.

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