Shopify to lay off 20% of its workforce

Shopify, a Canada-based online retail-services platform, says it would lay off about 20% of its workforce after selling some of its operations.

Flexport is buying Shopify’s logistics-fulfillment operations, including U.S. e-commerce platform Deliverr, setting up the freight company to add home-delivery services that would compete with Amazon.com for retailer business.

Shopify is also selling its 6 River Systems warehouse robotics operation to U.K. automated grocery-fulfillment specialist Ocado Group.

“We are changing the shape of Shopify significantly today to pay unshared attention to our mission,” Chief Executive Tobi Lutke wrote in a letter to employees on Thursday.

The company’s stock price rose almost 24%, closing at $57.30.

Some Shopify employees on the logistics team will move to Flexport or Ocado while others will be laid off, according to sources.

Shopify didn’t detail how many employees would be laid off and how many would move to the new companies.

The transactions effectively end Shopify’s attempt to stand up its own logistics-fulfillment operation alongside the e-commerce sales-technology platform it offers merchants.

Shopify bought Deliverr for $2.1 billion less than a year ago with plans to combine it with 6 River Systems into a single logistics unit.

It also acquired 6 River Systems in 2019 for $450 million.

However, the sale price to Ocado wasn’t disclosed.

WSJ/Hauwa Abu