Shopify, the Canadian e-commerce giant once regarded as the big winner of the pandemic’s online shopping boom, shed at least 20 jobs in Ireland this week.
he cuts are part of a company-wide workforce cull announced by chief executive officer Tobi Lütke, who acknowledged on Tuesday that Shopify had hired too many people after overestimating the growth of e-commerce.
Shopify on Tuesday became the latest tech giant to cut staff, with German-Canadian CEO Lütke telling employees in a memo that the Ottawa-based company was that day reducing its workforce by 10pc, which roughly equates to 1,000 jobs.
The CEO said the layoffs will primarily impact workers in the company’s sales, recruiting, and support roles.
A European spokesman for Shopify declined to comment on how the company’s Irish workforce would be affected or even to quantify the size of its workforce here. But one source said 20 workers received emails this week informing them they were being let go, while another source close to the company said they would be surprised if the figure wasn’t “far north of 20”.
The latter source estimates Shopify employed almost 800 people in Ireland – all of them remotely – and said the Irish operation was still trying to figure out for itself how many jobs had been
“They (Shopify) locked it down really well,” the source said.
“Only people who were being made redundant and their direct manager were informed of individual redundancies.
“There has been active encouragement to ‘keep your nose down and focus on your team’. In addition, everyone at director level was required to sign an NDA (non-disclosure agreement) to prevent leaks to the media.”
Irish workers made redundant last week will receive 16 weeks of severance pay along with an additional week of severance for every year they worked at Shopify.
One former Irish employee, who left voluntarily earlier this year, understands from conversations with ex-colleagues that a de facto hiring freeze has been implemented here because jobs in talent acquisition were also cut, alongside roles in customer support and sales.
On an earnings call with investors held on Wednesday, Shopify chief financial officer Amy Shapero said: “For the remainder of 2022, we expect to slow hiring to only the most strategic, and, with the exception of Deliverr (an e-commerce fulfilment company based in the US), exit this year with only a modest increase in total headcount versus the beginning of 2022.”
Ireland is believed to have Shopify’s largest cluster of staff outside of Canada, with the remainder mostly in the UK, Germany and New Zealand.
All staff in Ireland have worked remotely since the operation was set up in 2015 and Shopify was the largest remote-first employer in the country by last year.
The company historically had a strong focus on remote working, but the pandemic prompted Lütke to adopt a more permanent ‘work-from-anywhere’ model.
Shopify boomed during the first pandemic lockdowns, when millions of small businesses were suddenly forced to trade online after their physical outlets were compelled to shut.
The company’s success continued last year, when total annual revenues increased 57pc. As a result, Lütke wrote last week, “we bet that the channel mix – the share of dollars that travel through e-commerce rather than physical retail – would permanently leap ahead by five or even 10 years”.
“It’s now clear that bet didn’t pay off,” he added. “What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point.”
It’s thought Shopify has not replaced its head of Irish operations since John Riordan, director of support at Shopify and chairman of Shopify International, finished at Shopify in November.
Riordan, a remote-working advocate who is now chairman of non-profit organisation Grow Remote, told the Sunday Independent in January 2021 that Shopify employed 400 people in Ireland, having started with 50 in the Galway area, and that it had the “opportunity to become a 1,000-person employer”.
At the time, the e-commerce company had set out to hire more than 2,000 engineers globally and to expand its Irish workforce, but most of the roles here are still in customer support.
On Thursday, Riordan told the Sunday Independent that despite the slowdown in the tech sector, any workers who leave Shopify would quickly be snapped up.
“There are redundancies going on (in the sector) but companies are still crying out for talent,” he said.
“And a huge positive is that companies out there are looking for people with knowledge of how to work remotely.
“The fact they worked for a fully remote company is one of the biggest skills you can bring to the marketplace right now.”
Some of the biggest tech employers in Ireland have been slowing down their recruitment – or hinting at layoffs – amid mounting fears of a global recession and as soaring inflation takes its toll.
Last week it was revealed that Twitter said it “significantly slowed hiring” in the second quarter to manage costs, having imposed a hiring freeze in May.
Its second quarter sales slipped 1pc year-on-year to $1.18bn (€1.16bn), which the company attributed to a weak macroeconomic environment and online advertising market. Alphabet, Google’s parent company, with 8,000 employees in Dublin, has said it will be slowing the pace of hiring for the rest of the year, while Amazon said in April that it was overstaffed, after ramping up during the pandemic, and needed to cut back.
Microsoft, which employs 2,000 people in Ireland, told workers in May that it was slowing down hiring in the Windows, Office and Teams groups, while Facebook and Instagram parent Meta has slashed plans to hire engineers by at least 30pc. CEO Mark Zuckerberg told employees that he’s anticipating one of the worst downturns in recent history.
Meta, which has adopted a hybrid working model, is pausing its fit-out of part of the Fibonacci Square scheme in Ballsbridge developed by Johnny Ronan as it re-evaluates its global property requirements.
Last week, meanwhile, it was reported that Twitter is planning to reduce the size of the office space it occupies on Dublin’s Cumberland Street by leasing out one of its four floors to a new tenant.
However, Twitter told employees that no jobs would be affected by the move and has said that even if corporate offices as a whole are reduced in size, employees would transition to a remote-working model.