Shopify has announced to lay off 20 percent of its workforce which will impact more than 2,000 people.

The company also announced that the American multinational corporation Flexport will buy Shopify Logistics.

“Shopify will be smaller by about 20 percent and Flexport will buy Shopify Logistics; this means some of you will leave Shopify today. I recognize the crushing impact this decision has on some of you, and did not make this decision lightly,” said the company’s CEO Tobi Lutke.

The impacted employees will receive a minimum of 16 weeks severance plus a week for every year of tenure at Shopify.

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“Medical benefits and access to our employee assistance program (EAP) will be covered through this same period. We’ll also offer outplacement services if you want them, all office furniture we provided is yours to keep,” the CEO said in a blog post late on Thursday.

“We legally need the work laptop back, but we’ll help pay for a new one to replace it. You’ll have continued free access to the advanced Shopify plan should you opt to take an entrepreneurial path in the future,” he added.

In July last year, Shopify announced to cut 10 percent of its workforce — around 1,000 employees across verticals — as it failed to predict that the e-commerce industry would continue to grow beyond the pandemic at the same pace it did during the two-year period.

Shopify’s workforce jumped from 1,900 in 2016 to around 10,000 in 2021 to meet the expected growth. However, Lutke had said that it was now clear that the bet didn’t pay off.

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