Shopify has announced that it will be selling the majority of its logistics operations to the supply-chain technology company Flexport, which will result in a 20% reduction in employment. Over 2000 workers at the company are thought to be impacted by the decision.
The company will now be smaller as Flexport will shortly purchase their logistics division, according to a note from Tobi Lütke, CEO of Shopify, to shareholders and workers. As a result, some of Shopify’s staff would be leaving that day.
Additionally, he acknowledged that this was a challenging choice and that he was aware of the terrible impact it would have on certain people. A severance package consisting of at least 16 weeks of compensation as well as an additional week for each year of service at Shopify will be provided to affected employees.
According to the memo, they will also continue to get medical benefits, have access to employee support programs, and receive outplacement services during this time. Furthermore, impacted employees will be able to keep the furniture given by the company.
The affected employees have been requested by the company to return their work laptops as it is legally required to do so, but doing so will enable them to purchase a new one. All affected employees will also continue to enjoy free access to Shopify’s advanced plan, which will support their future entrepreneurial endeavours.
Shopify made job cuts last year throughout the month of July. A total of 10% of the company’s employees were let go, affecting almost 1,000 workers across various industries.