Shares of Shopify were up by 27% just prior to the opening of trading on Thursday, May 4. The primary factor in the company’s rapid expansion is the alleviation that investors feel as a result of Shopify’s decision to discontinue its involvement in the logistics business.
Shopify Lays Off 20% of Crew and Sells Logistics For Flexaport. Stocks 27% Up
On Thursday, May 4, the price of each share in the e-commerce platform reached an all-time high, having risen from $46.18 to $57.25 in a single day. It was a reaction to the positive Q1 2023 earnings.
Also on Thursday, May 4, 2023, Shopify made the news that it will be selling its logistics section to Flexport for around 13% of its worth in shares and laying off 20% of its employees, which will affect over 2.000 individuals.
The company announced plans to reduce staff in a statement on its blog:
“We are changing the shape of Shopify significantly today to pay unshared attention to our mission. There are a number of consequences to this, and I don’t want to bury the lede: after today Shopify will be smaller by about 20% 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.”
The move follows a pattern in which many large technology businesses have made layoffs due to economic headwinds. About ten months ago, Shopify decreased 10% of its employees or about 1,000 workers. Additionally, Shopify will be selling its logistics business to Flexport.
