A 20% Layoff At Shopify Is Planned, And Revenue Exceeds Expectations

(CTN News) – As part of its second round of layoffs, Shopify Inc. of Canada announced on Thursday that it would cut 20% of its workforce and that it had sold its logistics arm to freight forwarder Flexport.

As a result, its U.S.-listed shares shot up 16% in premarket trading.

Furthermore, the company also reported that its first quarter performance was better than expected, as more merchants utilized the company’s online tools and targeting services to attract customers while at the same time tackling high inflation rates.

In addition to the new tools that have been developed, more businesses have joined the platform, including Mattel and Coty, allowing the company to hike its subscription fees as a result.

With Shopify, you can run an e-commerce website that caters to small businesses, and it is known for its order fulfillment network, which the company put into place when it anticipated that the pandemic-inspired e-commerce boom would last for a long time.

Due to overestimation of growth levels, the company has since stated that it has laid off a significant portion of its workforce due to overestimation of growth levels in July of 2022.

As the e-commerce boom brought on by the global pandemic subsides, Shopify’s investment in the fulfillment network has come under closer scrutiny by investors who worry the capital-intensive project might put a strain on Shopify’s financials in the future.

This transaction was the result of Shopify selling its logistics unit Deliverr Inc, a company that it acquired for $2.1 billion less than a year ago as part of an all-stock deal that will give Shopify a 13% stake in Flexport, a startup in which it has previously invested.

Refinitiv data shows that the company’s revenue for the three months ended March 31, which was $1.51 billion, exceeded analysts’ expectations of $1.43 billion.

Moreover, the company also reported a surprise adjusted profit of one cent per share, which was higher than expectations for a loss of four cents per share.

How much does it cost to run a Shopify store?

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