Shopify, the online retail giant, announced Thursday it is cutting its workforce by around 20 percent, even as it reported strong revenue numbers that beat Wall Street estimates for the first quarter of the year.
Shopify CEO Tobi Lütke revealed the cuts to the company in a memo on its website but did not specify what positions would be affected.
“It’s the right thing for Shopify but it negatively affects many team members who we admire and love working with,” he said in the statement. “This is one of those times where both right and hard are true at the same time.”
The Shopify workforce cuts follow a string of similar moves in the tech industry, with mammoths including Meta and Amazon announcing tens of thousands of jobs would be cut this year. The moves come in an economy dealing with high inflation and a tight labor market, exacerbated in the tech industry by a number of high-profile bank failures.
The Canadian-owned Shopify also laid off 10 percent of its workforce in cuts last summer.
But Shopify also posted promising revenue data, saying it had total revenue of $1.51 billion in the first quarter, up 25 percent from last year. The company’s stock price surged by as much as 28 percent early on Thursday.
Lütke said the cuts were meant to change the “shape” of the company.
“I recognize the crushing impact this decision has on some of you, and did not make this decision lightly,” he said in the post.