TORONTO: Canada’s Shopify Inc said on Thursday it would let go 20% of its workforce in a second round of layoffs and sold its logistics arm to freight forwarder Flexport, sending its US-listed shares up 16% in premarket trading.
The company also reported better-than-expected results for the first quarter, as more merchants used its online tools and targeting services to attract customers tackling high inflation.
A host of new tools have encouraged more businesses from Mattel to Coty to join the platform, allowing the company to hike its subscription fees.
Known as the e-commerce platform for small businesses, Shopify had ramped up its order fulfillment network, when it expected the pandemic-led e-commerce boom to persist. But by mid-2022, it said it had over overestimated growth levels and laid off 10% of its workforce in July.
As the e-commerce boom brought by the global pandemic subsides, Shopify’s spending in the fulfillment network has been more closely scrutinized by investors who worry the capital-intensive project could weigh on earnings.
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