Shopify to reduce workforce by 20% as it narrows focus to core e-commerce business
Tara Deschamps
Coverage of Shopify’s Q1 earnings resulted in a flurry of reporting that included the following commentary by Rick Watson:
… Flexport will become the official logistics partner for Shopify.
The transaction is expected to close in the second quarter of 2023, but is subject to certain conditions and regulatory approval.
Rick Watson, founder of RMW Commerce Consulting, saw the deal as Shopify "correcting a huge mistake that they made in getting into the fulfilment business to begin with."
Shopify's prime product — software — generates high margins, whereas logistics is low-margin and often volume-oriented, and required Shopify to purchase other companies in order to compete, Watson said.
He thinks the layoffs and Flexport deal were aimed at boosting the stock because "that's what Wall Street is rewarding right now" and that Shopify had enough cash to carry its workforce "more or less indefinitely." He said he'd be shocked if there was another Shopify layoff soon.
The entire article can be viewed at thecanadianpressnews.ca.