Shopify (NYSE:SHOP) stock is taking a beating on Tuesday after the e-commerce company revealed plans to cut 10% of its workforce.
This news comes from Shopify founder and CEO Tobias Lütke in a memo sent to employees today. The decision will affect recruiting, support, sales, “over-specialized and duplicate roles” as well as those “too far removed from building products.”
According to the company’s CEO, these reductions come after the company underwent a massive hiring spree during Covid-19 lockdowns. Lütke says Shopify took a bet on the growing e-commerce economy jumping forward five to 10 years, but it didn’t pay off.
Here’s a portion of what the Shopify CEO said to employees in today’s memo:
“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. Our market share in ecommerce is a lot higher than it is in retail, so this matters. Ultimately, placing this bet was my call to make and I got this wrong. Now, we have to adjust.”
Holders of SHOP stock aren’t happy about today’s news. The falling price of the company’s shares reflects this. As of Tuesday morning, SHOP stock is down 16.5%. The stock is also down 77% year-to-date (YTD).
There’s more stock market news for Tuesday traders will want to know about below!
We’ve got all of the hottest stock news traders need to know about! A few examples include what’s moving shares of 3M (NYSE:MMM), McDonald’s (NYSE:MCD) and Walmart (NYSE:WMT) stock today. You can find out more on these matters at the following links!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
