Shopify announced important business and team changes in a blog published on May 4. The biggest shocker was laying off 20 percent workforce, followed by the company’s decision to dissect its logistics arm. Shopify reasoned these changes as setting its focus back on the “main quest,” which is making commerce simpler, easier, democratized, participatory and common for the masses.
“I think that we have built the best commerce platform in the world for that. Technological progress always arcs towards simplicity, and entrepreneurs succeed more when we simplify. But now we are at the dawn of the AI era and the new capabilities that are unlocked by that are unprecedented. Shopify has the privilege of being amongst the companies with the best chances of using AI to help our customers. A copilot for entrepreneurship is now possible. Our main quest demands from us to build the best thing that is now possible, and that has just changed entirely,” Shopify CEO Tobi Lutke said in the blog.
While Shopify promised compensation to the affected employees in the best possible way, it took an emotional toll on most of them. The affected employees were promised, “a minimum of 16 weeks severance plus a week for every year of tenure”. Add to this, the Canadian e-commerce giant offered extended medical benefits, outplacement services, office furniture provided by Shopify, replacement to the work laptop and free access to the advanced Shopify plan.
This is much for one to either lookout for a new job or start an entrepreneurial journey, right? But there’s more to the story. Some of the affected employees took to LinkedIn to express what emotional damage the news cost to them.
1. Responsibilities and Challenges at Home
Zain Asif, who worked as a software engineer at Shopify, explained with a “heavy heart” that he took a long time to process the news of his sacking. He was introduced to new responsibilities at home when he came across the unfortunate news.
“Having just become a dad last month, this news comes at a challenging time for my family and while it has been difficult to process, I want to take a moment to express my gratitude for the time I spent at Shopify,” he said.
“I truly enjoyed every single moment of my 1.5 years spent working at Shopify and loved that I got to show up to work everyday and solve complex problems alongside some of the most exceptionally talented and genuinely wonderful people. I am also proud of the progress I made, and I owe much of it to the mentorship, guidance and unwavering support provided by my coworkers. Your feedback helped me improve my skills and take on more responsibilities. You have left an indelible mark on my personal and professional journey, and for that, I will always be grateful,” Asif added.
The engineer earlier worked with companies like Ford, Bulloch Technologies, NVIDIA, BlackBerry and Molex. He asked for help from his LinkedIn network as he wish to return to the job market. He asked for recommendations from those who earlier worked with him in any capacity and endorsements for his skills mentioned on LinkedIn.
While asking for new opportunities suitable for his skills and experience, Asif also extended his support to fellow affected employees at Shopify. “To all the others who were also impacted, it’s been an absolute pleasure working alongside you. Please feel free to connect with me and let me know if you need a reference or how I can help you,” he said.
2. Smooth Exit Plan
Jerome Lecomte, who worked as Software Development Manager at Shopify, expressed his thought in a series of six posts about layoffs. Four of these are published as of now (May 15) and the remaining two are expected to come in the future.
“Layoffs are a nasty business. I’m no expert but through my career in tech, I survived 3 rounds and was on the receiving end of two. By now I have an idea of what to expect and when to expect it, and that knowledge helps me deal with a layoff a bit more easily than someone who has never gone through this ordeal before. Over the next couple of days, I’m going to share some practical thoughts, in the hope it helps you prepare for this experience should it ever come to you,” he wrote on LinkedIn.
In the first note, Lecomte addressed his colleagues who were unaffected by the massive layoffs. “We were your colleagues once, we shared professional and personal stories together, you depended on us for your work. Now we’re gone, sometimes without a chance to say goodbye to you or share one last advice (“whatever happens, remember not to engage the Gorn; it is just a test”). And you’ll likely never know why those of us you worked closely with were exited.
“The company’s explanations for the need to restructure will feel at odd with your day to day. Amidst all these emotions, you’ll have to pick up some of the work that we were doing, change the way you worked to adapt to this new reality, and deal with project timelines that may no longer be tenable,” he added.
Lecomte raised a question for his former colleagues “What does that all mean for your future?”. He added that this question helped him cope with reality. He goes on to compare a layoff with a “cliffhanger ending the current chapter in the book of your career”.
A new chapter for each affected employee will come with immediate challenges. “The journey of your career continues and you will endure. You’ve got this,” he said.
Emotional Damage
The second post of the series dealt with the emotional aspect of layoffs. Addressing all the laid-off employees, Lecomte said: “I’m not gonna pretend: it hurts. Your whole life was just thrown into an unfair and unnecessary ordeal. You’ll go through the first stages of grief (Denial, Anger, Bargaining) in rapid succession, multiple times and not necessarily in a linear order. And you’ll invariably end up asking yourself: what did I do wrong to deserve the boot?”
He answered the question himself saying that no employee did wrong on his/her part, adding: “You showed up, every day. You did your job with dedication. You delivered value for the projects you were told were the most important you could be doing right now. You did that.”
Lecomte admitted to the fact that they could have done more but it could not have made a difference. “While there is only upside to becoming 1% better everyday, in practice you’ll never know for sure what criteria were used to select you as part of the layoff. Therefore those potential efforts would have been shots in the dark, hit or miss.”
“The thing to realize is that the decision to choose who gets laid off was always out of your control. Expending energy trying to change something you have no influence over is futile. Instead, focus your efforts on what you can directly control. And right now, that’s the next step in your career. Forget about the past, what is done is done, and look toward the future and what can be,” he added.
The Right Use of Compensation
In the third part of the series, Lecomte suggested to his fellow laid-off employees what to do with the severance package.
“For everything else (submitting past expenses & medical claims, transferring equity and RRSP to other financial institutions, returning company property, etc), you usually have a grace period of anywhere between 30 to 90 days, sometimes even up to a year, to submit the paperwork. You’ll get to it in due time, but for now it’s safe to ignore,” he said.
“It’s always a good idea to seek counsel from an employment lawyer. You know your worth and your personal circumstances in life better than anyone, and they know the common law applicable in your region and industry. They can advise you on the fairness of the exit offer in relation to your situation. Remember that, in the eye of the law, the point of a severance package is to support you while you find a new position at a level of responsibilities and compensation equivalent to or better than your former position so you can maintain your lifestyle. Taking a pay cut or a step back in your career (though sometimes inevitable) is not a satisfactory outcome,” Lecomte added.
Speaking on whether one should take his/her former employer to court, Lecomte said the legal battle is usually lengthier than expected. “It’s a game of attrition between 2 parties waiting for the other to cave in first, so they can meet in the middle. The payout also comes at the end of this process, retroactively, so make sure to be in a solid financial situation that can support you till then before embarking on this long road.”
“Once you decide to accept the exit offer, in whatever form, a weight will be lifted off your chest,” he added.
What to do With Free Time?
The fourth part of the series spoke on how to utilize free time after termination from work. Lecomte advised the affected employees to structure their days. “Tasks to complete, team meetings to attend, reports to write, customers to serve, presentations to give, these were the beats that kept us moving, day in, day out. Now it’s all gone. The music went abruptly silent, and our body and mind are experiencing the withdrawal effect of such a sudden change in rhythm. How do you find structure again when our company tenure has numbed our practice of dealing with so much free time and possibilities all at once?”
Adding that it’s wise to keep the momentum, Lecomte said: “Start by doing just one thing per day that brings you joy. On the one hand, doing nothing, cooped up all alone in your dwelling (more on this tomorrow), will lead you to despair. On the other hand, trying to do too much too soon by catching up with all the things in your personal backlog will lead you to burnout in no time.”
According to Lecomte, one must focus on one thing a day, starting with going outside and exploring an unfamiliar neighbourhood. Similarly, he advised a plan for the entire week — with ideas of reading a book, cooking something, practicing a hobby and meeting friends.
“The important thing is to show up and do it, so make it easy by picking something that brings you joy. At the moment, my own calendar looks a little like this: handle layoff paperwork for no more than a hour, connect with friends for 30 minutes, then depending on the inspiration of the day, create a pixelart on my Cintiq tablet, tend to the garden, build a new mailbox (sic), or work on a game idea I’ve had for a while, etc,” he added.
Lecomte’s plan aims to help the affected employees return to their daily rhythm. Apart from Shopify, he has worked with companies like Shutterstock, Okta, Inc. and OANDA.
3. Embracing The Change
Chido Dimairo, who worked with Shopify as Retail Team Lead, shared her experience post-layoffs. She termed her new tenure “funemployment,” embracing the change and making the best of her free time.
“After spending the last four days feeling down and sorry for myself post Shopify Layoffs, I decided to mark today as my official day #1 of funemployment. Instead of going round in circles wondering why me, what could I have done better or differently, I’m choosing to embrace this change and make the most of the time off,” Dimairo said.
“One thing I always loved about my previous role and work environment was the promotion of personal growth and development but as a People Lead I would always find myself more invested in my team’s growth and development. Each week rolled around and each week I chose another task over my allocated professional development time. From here on out, that changes,” she added.
Dimairo started her funemployment with daily tasks like learning something new, engaging in fun activities and looking for the next adventure. “Looking forward to more fun and productive days ahead,” she concluded.
Dimairo joined Shopify as Customer Success Guru for Wellington & Wairarapa, New Zealand, in 2018. Within one year, she was promoted to the role of Team Lead. She earlier worked with Karen Walker, ANdREA MOORE, Circa Theatre and Cotton On Group.
Layoffs at Shopify
This is not the first time that Shopify announced a major layoff. In July 2022, Shopify cut its workforce by 10 percent, citing an overestimated bet on the e-commerce boom during the Coronavirus pandemic. Social media was flooded with posts from the affected employees back then too.
Germany-based Caroline Dohrmann, who worked as a content manager for Shopify, revealed how her inbox was flooded with 25 job offers within two days after her layoff.
“I hope this doesn’t come across wrong, because I don’t feel the need to brag, but I really feel the need to shout out how rad I think LinkedIn is as a network and community. On Tuesday, I lost my job because I was affected by the 10% #layoffs at #Shopify. On Wednesday, I posted about it and thanked my colleagues for the great time at the company,” Dohrmann said.
“As of yesterday, I have 25 job offers in my inbox. By next Wednesday, I have a total of 7 interviews. In one week. Unbelievable. The support and engagement I’ve experienced from the people on LinkedIn over the past few days is incredible and I haven’t experienced this on any other platform,” she added.
In August last year, Shopify extended its wave of layoffs by ousting 70 employees. However, the company rewarded the rest of its staff with a pay hike at the same time. A lot has happened over the last year as Shopify launched a series of products to recover from losses. It also helped the Canadian giant exceed Wall Street estimates in the first quarter results of 2023.
On May 4, 2023, Shopify announced that it has recorded revenue of $1.51 billion, 25 percent higher than the last year. According to Refinitiv, Wall Street estimates were $1.43 billion. Shopify also reported earnings of $68 million, which means five cents per share. The company earned one cent per share excluding items, whereas analysts estimated a loss of four cents per share.
