- Shares of Shopify (SHOP.US) fell more than 16.0% in today’s session after the Canadian e-commerce company announced plans to lay off about 10% of its global workforce (about 1,000 employees).
- CEO Tobi Lutke cited a slump in online spending after a pandemic boom and took responsibility for a flawed growth strategy.
- The company’s sales skyrocketed during the pandemic and management assumed this trend would continue in the future, so it decided to hire more staff and invest in technology. However, as restrictions were eased, ecommerce sales declined and Shopify’s revenue growth slowed for four consecutive quarters.
- “We’re betting that channel mix, the portion of dollars that travel through e-commerce rather than physical retail, will move forward permanently in 5 or even 10 years.” “It is now clear that the gamble has not paid off,” Lutke wrote.
- The company will report its second quarter results before the opening bell on Wednesday.
Shares of Shopify (SHOP.US) are down 75% since the start of the year and are currently testing pandemic lows at $32.30. In the event of a break below the above support, the movement can be accelerated downwards. Source: xStation5
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