Managerial job cuts come after firings related to sales fraud at e-commerce firm.
Shopify has made what appear to be more layoffs across a number of roles in recent weeks, following a C-suite shakeup and firings that were reportedly related to issues of internal sales fraud last summer.
Shopify’s layoffs “removed layers that created complexity without additional merchant value.”
Ben McConaghy,
Shopify
Social media posts have cropped up over the last week with employees in managerial roles—including merchant success, operations, sales, and account executive teams—announcing they were impacted by layoffs and restructuring at the e-commerce firm.
On Monday, The Logic reported that Shopify had fired employees in sales roles following an internal investigation related to what it said were inflated sales numbers. The new layoffs appear to be unrelated to the firings, as they appear to impact employees in roles outside of sales.
Toronto-based employment firm Samfiru Tumarkin, which has previously represented Shopify employees in legal action against the company over a severance pay dispute, told BetaKit it was contacted by some Shopify employees affected by layoffs last week, but not enough to suggest that the company had conducted a mass layoff.
In response to questions about the recent layoffs, Shopify spokesperson Ben McConaghy said in a statement to BetaKit that the company “removed layers that created complexity without additional merchant value.”
“This impacts a fraction of a percent of our team, keeping us fast, sharp, and focused on long-term merchant success,” he said. Shopify employed roughly 8,100 workers as of December 2024, so a layoff representing a fraction of a percent could impact as many as 80 people. In Ontario, regulations require longer notice periods for employees affected by a group termination of more than 50 workers. It’s not clear if Shopify’s recent layoffs met that criteria. BetaKit has reached out to Ontario’s labour ministry for comment.
This comes on the heels of a report by The Logic indicating that Shopify investigated and fired employees who had inflated sales numbers. McConaghy confirmed to BetaKit that “a very small, single-digit number of salespeople misrepresented the scope of products they’d sold. We immediately investigated, fired them, and strengthened our systems. This had no impact on our financials and the issue is closed.” He did not respond to questions about whether the more recent job cuts were related.
According to The Logic, the sales fraud went on for over a year. Shopify conducted an internal investigation, which resulted in the firing of a sales team in June. Former COO Kaz Nejatian issued an ultimatum to staff to confess that they had falsified the numbers or face the consequences, The Logic reported.
Founded in 2006 in Ottawa, Shopify is an e-commerce platform that sells services to small merchants as well as large enterprises. It’s currently Canada’s second-largest company by market capitalization, worth just under $300 billion CAD.
The firm has dealt with executive turnover in recent months. Nejatian left to lead Opendoor in September and lured away vice-president of operations Giang LeGrice—his former “second-in-command.” Chief revenue officer Bobby Morrison also left in October as Shopify named general counsel Jess Hertz as Nejatian’s replacement.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Feature image courtesy Shopify.
