The company announced Thursday in a blog post it will also cut about 20% of its workforce, the second mass layoff its had in less than a year. Last year, Shopify trimmed 10% of its workforce and reportedly laid off dozens of other employees before and after that announcement. The company said Thursday those affected will receive 16 weeks of severance pay and medical benefits.
“There’s no way to make this good news, but we designed a package that will attempt to make it the best possible version of a bad day,” Shopify CEO
The business changes are also a remarkable reversal after the Canadian company's multiyear effort to build its own warehousing and delivery services. But investors welcomed the company's move to focus more on its retail business on Thursday by sending its stocks as high as 17% in premarket trading.
Shopify also said in its earnings report that it pulled in
Most of Shopify’s fulfillment assets will be acquired by logistics provider Flexport in an all-stock deal that also includes the sale of the shipping service company Deliverr, the company said Thursday. Shopify bought Deliverr just last year for
In exchange, Shopify will receive a stake of about 13% in Flexport, bringing its total ownership in the privately held company up to the high-teens, the company said. Flexport will become the official logistics partner for Shopify, which provides e-commerce tools for merchants. It will also acquire Shopify's warehouses.
On Thursday, the British grocery-tech company
“This is about removing distractions,” said
Shopify's logistics network is comprised of Deliverr,
The sell-offs come as the company based in
Shopify is returning to its roots, President
“Fundamentally, this lets Shopify get back to what we do better than anyone on the planet, which is the retail side of the business,” Finkelstein said.
Meanwhile, Flexport CEO
Flexport, last valued at
Even if the company were still valued at
Shopify and a representative for
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