Shopify‘s announcement to lay off 10 percent of its staff followed by recurring losses in the recent past has affected its position in the market of content management systems (CMS). As per the latest data published by w3techs.com, Shopify lost 0.1 percent of the CMS market share in July. The lost market share was picked by WordPress, which tops the list of top performers.
This is more of a transition year, in which ecommerce has largely reset to the pre-COVID trend line.
Amy Shapero, CFO, Shopify
Leading CMS
WordPress is the most popular CMS with 64.3 percent of market share, followed by Shopify with 6.2 percent of hold. Wix, Squarespace and Joomla hold the next three spots in the top five performing CMS list with market share of 3.4, 3 and 2.5 percent respectively.
Some other prominent CMS solutions with less than 2 percent of market share included Drupal, Adobe Systems, Google Systems, Bitrix and Webflow.
| CMS | Market Share | Change* |
| WordPress | 64.3 % | 0.001 |
| Shopify | 6.2 % | -0.001 |
| Wix | 3.4 % | |
| Squarespace | 3 % | |
| Joomla | 2.5 % |
Massive Layoffs
On Tuesday, Shopify Inc. CEO and founder Tobi Lütke informed his staff in an internal memo that around 1,000 employees or 10 percent of the total workforce will be laid off to cope up with the recurring losses. First reported in The Wall Street Journal, the layoffs were later confirmed by the Canadian e-commerce company in a blog post.
“Shopify has to go through a reduction in workforce that will see about 10% leave by the end of the day. Most of the impacted roles are in recruiting, support, and sales, and across the company we’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products,” Lütke said in an email published by news.shopify.com.
The CEO reasoned layoffs as a rollback on Shopify’s ambitious bet on the e-commerce growth seen during the coronavirus pandemic. After making huge investments based on new shopping habits of customers in lockdown, the company realised lately that people have come back to old shopping habits, resisting themselves from online shopping when physical options are easily available.
“We bet that the channel mix – the share of dollars that travel through ecommerce rather than physical retail – would permanently leap ahead by 5 or even 10 years. We couldn’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’s now clear that bet didn’t pay off. What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point. Still growing steadily, but it wasn’t a meaningful 5-year leap ahead,” he explained.
$1.2 Billion Net Loss
Shopify incurred a USD 1.2 billion loss in its most recent quarter. Lütke warned of a slower revenue growth ahead this year.
Shopify CFO Amy Shapero was quoted as saying by searchenginejournal.com that this is “more of a transition year, in which ecommerce has largely reset to the pre-COVID trend line.”
