E-commerce giant Shopify laid off 1,000 employees, sending stock down 14%.

Canadian e-commerce giant Shopify is cutting about 1,000 employees, and the boss writes in an internal email that 10% of the company’s global workforce will quit by the end of the day.

Demand for Shopify, which helps businesses build e-commerce websites, skyrocketed during the pandemic, but stocks are down 77% this year.

Shopify CEO Tobias Lütke explained that the layoffs were due to the company misjudging the growth of the e-commerce sector and that he was “deeply sorry.”

“We’re betting that channel stack – the fraction of the dollars that go through e-commerce rather than retail – will forever jump ahead by 5 or even 10 years,” Mr. Lutke wrote in an internal email on Tuesday (via local time). after published online.

“At the time, we couldn’t know for sure, but we knew that if it were true, we would have to expand the company to fit.

“Now it is clear that the bet did not pay off. What we are seeing now is that the mixture is returning to about the level at which pre-Covid data suggested it should be at the moment.”

Shares of Shopify fell 14% to $31.55 in New York on Tuesday. Wall Street Magazine first reported job cuts earlier in the day.

According to Mr. Lutke, most of the layoffs were related to recruitment, support and sales.

He added that they are also cutting back on overly specialized and duplicative roles within the company, as well as “some groups that were convenient to have but too far away from building products.”

“Those affected today will receive 16 weeks of severance pay, as well as an additional week for each year they work at Shopify. We will eliminate any capital shortfall and expand any medical benefits,” he told employees in an email.

Mr Lutke said the company will also offer access to career coaching, interview support and resume writing, and can share its data with other companies looking for employees.

“And since each path we take requires some basics, we will continue to pay for the Internet costs during this period, the home office furniture we provided is now yours, and although we will need to refurbish our equipment, we are offering a kickstart allowance. on which you can buy new laptops,” he said.

Shopify’s job cuts are the latest in a wave of layoffs in the tech sector.

Earlier this month, Twitter cut 30% of its talent team, which it said was less than 100 employees.

Microsoft also confirmed a “small number” of job cuts.

Last month, Netflix fired 300 employees as he was desperately trying to cut costs after dwindling subscribers. In May, the company has already fired about 150 employees and dozens of contractors.

Meta CEO Mark Zuckerberg said his company will cut its plans to hire engineers by at least 30% this year.

Zuckerberg also said that the Meta will implementing higher standards for their employees and breaking ties with those who failed to meet the new performance threshold.

“In fact, there is probably a group of people in the company who shouldn’t be here,” he said at a company-wide Q&A meeting on June 30.

Originally published as ‘By the end of the day’: Shopify cuts 10% of staff, causing stock to drop