The management job cuts come after layoffs linked to sales fraud at the e-commerce firm.
Shopify has made what appear to be more layoffs in a number of positions in recent weeks, following shakeups and departures in senior management that were reportedly linked to internal sales fraud issues last summer.
The layoffs at Shopify “removed layers that created complexity without adding trade value.”
Ben McConaughey
Shopify
Last week, reports surfaced on social media of employees in management positions, including sales, operations, sales and account managers, announcing that they had been impacted by layoffs and restructuring at the e-commerce firm.
On Monday The Logic reports. that Shopify fired employees in sales positions following an internal investigation into inflated sales figures. The new layoffs do not appear to be related to layoffs, as they appear to affect employees in non-sales positions.
Toronto-based outplacement firm Samfiru Tumarkin, which previously represented Shopify employees in a lawsuit against the company over a severance pay dispute, told BetaKit that it had been contacted by some Shopify employees affected by layoffs last week, but not enough to suggest the company had carried out a mass layoff.
In response to questions about the recent layoffs, Shopify spokesman Ben McConaughey said in a statement to BetaKit that the company has “removed layers that created complexity without adding trade value.”
“This impacts a fraction of a percent of our team, allowing us to work quickly, accurately and focused on long-term trading success,” he said. Shopify had approximately 8,100 employees as of December 2024, so layoffs of a fraction of a percent could affect up to 80 people. In Ontario, regulations require longer notice periods for employees affected by a group layoff of more than 50 workers. It's unclear whether the recent layoffs at Shopify met these criteria. BetaKit has reached out to the Ontario Ministry of Labor for comment.
This comes on the heels of a report from The Logic that found Shopify was investigating and firing employees who were inflating sales figures. McConaughey confirmed to BetaKit that “a very small, single-digit number of sellers misrepresented the volume of products they sold. We immediately investigated, terminated them and strengthened our systems. There was no impact on our financial performance and the matter is closed.” He did not respond to questions about whether the recent job cuts were related.
According to The Logic, the sales scam continued for more than a year. Shopify conducted an internal investigation that resulted in the firing of its sales team in June. Former chief operating officer Kaz Nezhatyan gave employees an ultimatum: they must admit they falsified the numbers or face consequences, The Logic reports.
Founded in 2006 in Ottawa, Shopify is an e-commerce platform that sells services to both small merchants and large businesses. It is currently Canada's second largest company by market capitalization, valued at just under C$300 billion.
The firm has experienced executive turnover in recent months. Nejatyan left to lead Opendoor in September and lured visiting vice president of operations Jang LeGrice is his former “second-in-command.” Chief Revenue Officer Bobby Morrison also left his post at Shopify in October. Appointed General Counsel Jess Hertz as a replacement for Nezhatyan.
Disclosure: Good Future, the majority owner of BetaKit, is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Image courtesy of Shopify.
