Changes in the Shopify team

Team,

I’m sitting down to write this email not far from where I once sat writing the first few lines of code for Shopify itself. These lines of code built a company and sent it on a wonderful journey full of amazement, toil, success, failure, ambition and, above all, comrades. Being on a journey, surrounded by great teams, and doing challenging things is everything.

All of this makes writing this email more difficult: the next part of the trip will involve fewer of our teammates than we’ve picked up along the way. Shopify should go through a workforce reduction that will see about 10% furloughed by the end of the day. Most impacted roles lie in recruitment, support and sales, and across the company, we’re also eliminating overly specialized and repetitive roles, as well as some groups that would have been appropriate to own but are too far from building products. Emails will be sent out in the next few minutes to indicate if your role has been affected; The affected people will then have a meeting with a leader on their team.

For a company like ours, this news would be hard to absorb. It will be much more difficult for those who leave today. I will share as much detail as possible about how we got here, and for those who leave, what happens next.

How did we get here

When the Covid pandemic started, almost all retail stores turned online due to requests for shelter in place. Shopify is in high demand. To help merchants, we got rid of roadmaps and shipped everything that could come in handy. It was tough, but we know for a fact that more merchants have survived the pandemic because of the work we’ve done at this time and that’s exactly what our mission is about.

Shopify has always been a company that makes the big strategic push that merchants demand from us – that’s how we succeed. Before the pandemic, e-commerce growth was steady and predictable. Was this elevation temporary or a new normal? And so, given what we’ve seen, we’ve made another bet: We’re betting that the channel mix – the share of dollars traveling through e-commerce rather than physical retail – will permanently jump forward 5 or even 10 years. We didn’t know for sure at the time, but we did know that if there was a chance that this was true, we would have to expand the company to match.

Source: US Census Bureau

Source: US Census Bureau

It is now clear that the bet did not pay off. What we’re seeing now is the mix returning roughly to where the pre-Covid data suggested it should be at this point. It’s still growing steadily, but it hasn’t been a meaningful jump for 5 years. Our market share in e-commerce is much higher than it is in retail, so this is important. In the end, placing this bet was my call and I got this wrong. Now, we have to adapt. As a result, we have to say goodbye to each other today and I am deeply sorry for that.

For 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’d like to support each of you over the coming weeks and months as much as possible, so we’re offering a generous severance package. Those affected today will receive 16 weeks of severance pay, plus an additional week for each year in Shopify. We will remove any capital cliff, and extend any medical benefits.

Knowing that Shopify is just one stop on a career journey, we also like to help prepare everyone for success as they take their next steps. We will provide outsourcing services with access to professional training, interview support, CV drafting, etc. And since each route taken requires some basics, we will continue to pay for the internet for this period, the home office furniture we provided is yours now, and while we will need to get our equipment back, we are offering a start-up allowance that can be used to purchase new laptops. If you wish, you can add your email addresses to the list which we will share with other companies looking for talent. And for those who find themselves drawn to the path of entrepreneurship, Shopify also covers a free account for everyone.

I would like to express my sincere gratitude to each of you for all you have done to support traders and our mission to make trading better for all.

What’s Next

Our opportunity is huge and it’s still early days for Shopify. Every team here now focuses on either building products or providing direct support to those who do. Our customers are merchants, entrepreneurs and small business owners – the cornerstones of our economy and specifically those who are hit the hardest during recessions. Most of them already feel it. Once again, we have a clear goal in mind in these difficult macroeconomic times, and we will use everything we have to help them succeed and come out stronger. This is our primary mission.

The entrepreneurs we serve are amazing individuals. 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 adjustments we had to make were to grow into something bigger. This time we evolve into something more focused, more motivated, and more unique to the task. The times require it of us, and we will rise to the occasion once again.

– Toby

Shopify CEO

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