equipment,
I’m sitting to write this email not far from where I once sat to write the first lines of code for Shopify itself. Those lines of code created a company and sent it on a fascinating journey of wonder, effort, success, failure, ambition, and most of all, camaraderie. Being on a journey, surrounded by great colleagues, doing hard things is what it’s all about.
All of which makes this email that much harder to write: the next leg of the journey will involve fewer companions than we’ve picked up along the way. Shopify is due to go through a downsizing that will see around 10% leave by the end of the day. Most of the affected roles are in recruiting, support, and sales, and across the company we’re also eliminating over-specialized and duplicated roles, as well as some groups that were convenient to have but too far removed from product creation. Emails will go out in the next few minutes clarifying whether your role was affected; those affected will have a meeting with a leader of their team.
For a company like ours this news will be difficult to digest. It will be even more difficult for those who leave today. I’ll share as many details as I can about how we got here and, for those leaving, what happens next.
How we got here
When the Covid pandemic started, almost all retail businesses moved online due to shelter-in-place orders. Demand for Shopify soared. To help traders, we threw out our roadmaps and sent everything we could find useful. It was tough, but we know for sure that more merchant businesses survived the pandemic because of the work we did in that time and that’s exactly what our mission is about.
Shopify has always been a company that makes the big strategic bets that our merchants ask of us – that’s how we succeed. Before the pandemic, e-commerce growth had been steady and predictable. Was this increase a temporary effect or a new normal? So, given what we saw, we made another bet: We bet that the channel mix, the share of dollars traveling through e-commerce as opposed to brick-and-mortar, would be permanently advanced by 5 or even 10 years. We didn’t know for sure at the time, but we knew that if there was a chance that this was true, we would have to expand the company to match it.
Source: US Census Bureau
It is now clear that the bet did not pay off. What we see now is that the mix is back to roughly where pre-Covid data would have suggested it should be at this point. It continued to grow steadily, but it was not a significant 5-year jump. Our market share in e-commerce is much larger than in retail, so that’s important. Ultimately making that bet was my call and I was wrong. Now, we have to adjust. As a result, we have to say goodbye to some of you today, and I’m very sorry.
To those leaving Shopify
Everyone will feel this news in their own way, but what is universally true is that it will be difficult for everyone. We want to support each of you in the coming weeks and months as much as possible, so we are offering you a generous severance package. Those affected today will receive 16 weeks of severance pay, plus an additional week for each year of tenure at Shopify. We will remove any equity cliff and expand medical benefits.
Knowing that Shopify is just one stop on a career journey, we’d also like to help everyone set themselves up for success as they take their next steps. We will offer outplacement services with access to professional training, interview support, CV development, etc. And since every path taken requires some basics, we’ll continue to pay for internet costs for the period, the home office furniture we’ve provided you with is now yours. , and while we’ll have to get our hardware back, we’re offering a starter bonus that can be used to buy new laptops. If you want, you can add your email addresses to a list that we will share with other companies looking for talent. And for those drawn to the entrepreneurial path, Shopify also covers a free account for everyone.
I want to express my sincere thanks to each of you for all you have given to support merchants and our mission to make commerce better for everyone.
What follows
Our opportunity is huge and it’s still early days for Shopify. Now all the teams here are focused on building products or directly supporting those who do. Our customers are traders, entrepreneurs and small business owners – the foundation of our economy and precisely those who are usually hardest hit during recessions. Most of them already feel it. We have a clear goal again in these challenging macroeconomic times, and we will use everything we have to help them succeed and come out stronger. This is our core mission.
The entrepreneurs we serve are exceptional people. They inspire us individually and as a company to be the best versions of ourselves. We’ve adapted many times, in many ways, during Shopify’s intense growth journey. Most of the adaptations we’ve had to make have been to grow into something bigger. This time we become something more focused, more driven and more singular in mission. The times demand it from us, and we will be up to it again.
– tobi
CEO of Shopify