United States: Shopify will lay off 20% of employees – 05/04/2023 – Market

Shopify said on Thursday it would lay off 20% of its staff in a second round of mass layoffs. The company also said it sold its logistics arm to Flexport, raising its US-listed shares by 16% premarket.

The Canadian e-commerce company also reported better-than-expected results in the first quarter, as more merchants used its online tools and targeting services to attract customers grappling with high inflation.

A series of new tools has encouraged companies like Mattel and Coty to integrate Shopify into their own platforms, allowing for increased subscription fees.

Known as the e-commerce platform for small businesses, Shopify has grown its order fulfillment network when it expected the pandemic-led e-commerce boom to persist. However, in mid-2022, it said it overestimated growth levels and laid off 10% of staff in July.

The sale of logistics unit Deliverr, a company acquired for US$ 2.1 billion (R$ 10.5 billion) less than a year ago, was made in a stock purchase agreement that will give Shopify a 13% stake in Flexport, startup in which he made a previous investment.

Shopify reported $1.51 billion (R$7.5 billion) in revenue for the quarter ended March 31, beating analysts’ estimates of $1.43 billion (R$7.1 billion), according to data by Refinitiv.

The company also made an adjusted profit of $0.01 (R$0.05) per share, compared with expectations for a loss of $0.04 (R$0.20).