Shopify Lays Off 20% of Crew and Sells Logistics For Flexaport. Stocks 27% Up

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.

Shopify gained 27% before Thursday’s session as investor relief that the company would sell its logistics to Flexaport.

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.

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