Shopify to lay off 10% of workers in broad shake-up
wsj.com
wsj.com
Now, just don't tie those benefits to an NDA, and you'll truly be a company I'd look forward to getting fired from, Shopify.
I looked forward to reading a lay off message without the obligatory "what a journey" message but like that was in the opening paragraph. I'd say the message was fairly standard.
Tobi isn't a sociopath. The people he puts at the top aren't sociopaths. They're genuinely nice people, trying their best, and trying to do their best for everyone despite hard situations.
It truly is just a book club disguised as a publicly traded company.
In all seriousness, I would separate the fact the top executives are good people, with the fact (at least in the U.S) they have become notorious low ballers for top engineers
Maybe the dev side is better but my impression is that the design side has no ownership and is driven primarily by the loudest opinion rather than any sort of data or testing. And when you have five layers of approvals where people pick on the easiest and least important aspects that ends up being a very slow design by committee. The end result of this culture is very low efficiency and consistently mediocre outcomes.
The people who thrive in their culture appear to be the loudest and most aggressive.
It's a very controlled legal wording and process for a large redundancy approach and must be adhered to very carefully so as not to fall foul of tribunals and unfair dismissals.
I don't know Klarna or Shopify from the inside, but I suspect this difference is largely down to the differences in legal obligations between Canada and the UK
So, in my understanding at least, fired is "at fault" and redundant is "no fault".
Additional week for every year of tenure at Shopify.
No Equity cliff.
Medical benefits (for 16 weeks?).
Internet costs reimbursement (16 weeks?).
Get to keep home office furniture.
Kickstart allowance that can be used to buy new laptops.
Outplacement services.
Free Shopify account those who wants to start on their own.
if it’s a standard one year cliff then it just means if you’ve worked there for 5 months you get 5 months of equity whereas you would have gotten zero. it’s not “all the equity”
Also Shopify is -80% ytd so if you were hired the beginning of the year you were expecting a completely different compensation package than you are getting now.
Expand on this? You querying the prod db to sus out the health of the company?
You don't even have to explicitly nose around, looking at the logs you'll see customer IDs and if they are sequential a keen eye will notice if they stop getting any higher.
It was great for planning the on-call rotation as well as giving us a heads up on which nights we could go out drinking and how late we could come in the next morning.
Last job I had before this one, I came into work the week before Thanksgiving to a mandatory morning meeting that consisted of "the company is out of business effective immediately, you will all be emailed your severance details by personal email, please clean out your desks".
Also, by layoff N, you're cutting meat unless you are a massively bloated company, which is somewhat rare this time around (unlike HP, Cisco, Sun, etc. in 2001).
They're probably getting rid of the least effective per dollar spent (or trying to, good luck measuring anything, especially around productivity)
Well, ok - "the most expendable" then.
After the first or second round of layoffs that I avoided, I mentioned to an older employee that I was really glad to dodge that bullet. "I don't know," he said. "The earlier ones usually get the better deal." This was so true! I stayed until the doors were closed for good and didn't even get vacation paid I was owed. I don't regret it though because as the company imploded I got to try my hand at new roles, and worked with a really clever team that tried heroically to turn the company around.
That reminds me though. I went through quite a few big layoffs at GE and one of the better ones was when they were offering people 26 weeks of pay plus one week for each year of service. Many of these people had 20+ years so they would have gotten nearly a year of pay to quit. Almost nobody took it.
If you're year 1.5 into a 4 year vest, you get all 4? or 2?
I like that mail, ckear, to the point, factual and self critical. Severence packages are good, really good. All in all, quite a change from other companies firing people over zoom.
Fyi for those who don't know Tobi is German, but moved to Canada where he started Shopify.
Important to keep in mind that engineering roles may not be as affected as other departments.
That’s pretty insane growth. No wonder
What are the safest industries in tech right now? Feel like it’s gonna get worse
The ones that make the most money with little head count in a short amount of time and those who are selling shovels and offering services for financial institutions or in trading systems.
Fin processing should be OK but if volume of processing drops significantly (main revenue driver) then they will have to look at ways to protect their margin.
Crypto is already in a bad spot with low growth options.
I'm not talking legacy - I'm talking startups that are trying to take market from the bank through subsidized VC and repackage it to sell to the banks which feels like a lot of the fin services business model.
If anything fin legacy (i.e. IT dept) probably pretty safe.
0. https://www.pymnts.com/news/retail/2022/shopify-makes-1b-bet...
Quoting the article you referenced > and is offering wages up to $25 hourly.
Defense has a lot of challenges. The government isn’t a great or reliable customer. The contractors tend to lay off on great waves if they lose and important contract. They have quarterly earnings targets to hit like everyone else.
People used to think the phone company was a safe spot to lay your hat but they found layoffs too be an easier way to goose earnings than growing revenue.
Everything else, it's just a blip. Upward and onward. Be greedy when others are fearful etc
if Peter Zeihan is right about population and boomers. our world is shrinking with less young people for consumption, boomers retiring and taking their money to less risky investment. the money that prop up start up could be dry pretty soon.
That's really the calculation people need to make.
At a large tech employer? How are they doing? Is what you're working on strategic? Do you seem to be valued or are you maybe a bit on the bubble?
Depending on the answers, it may make sense to stay put or it may make sense to find a life raft even if it isn't as cushy in some ways as where you are. And, as someone else noted, industries aren't homogeneous. Individual employers matter.
I wouldn't worry too much if I were at a similar company.
Getting laid off during Covid was a boon for many people
During dot-bomb, I got lucky and landed another (lower paying) job with someone I knew at a small company. But there were a lot of people who were out of work or underemployed for a long time. And some I knew on the older side never really recovered I think.
In situations like these where the wealthy still have a ton of money, it is far better to be in a business that a) the wealthy don't understand, and b) is so outlandish that you can't assign a hard value to it.
If you make $1 in profit, then investors can assign it a hard value (10-15x ARR). If you make $0 in profit, then investors can spin up narratives about your "potential".
Why look at the companies? See who's growing in a logical fashion. If the company doubled in size at the start of COVID and keeps growing at similarly crazy rates - that might be a sign of trouble. It doesn't matter if the company is 100, 1000, or 10,000. The same general rules apply.
Belts are tightening. If a company was hiring stupidly/risky, they are going to need to lay off people - unfortunately. Or maybe they don't "need to" layoff, but they will want to. We've already seen this at some of the bigger tech companies.
From what I can see they are providing software and services.
Even the biggest software teams I have seen were rarely larger than 50-80 people.
And they were working on large complex codebase for AAA games.
Of course you need support, admin, HR, and sales, and R&D on new projects, but still.
How can they manage to productively use the time of 10000+ people?
What are they doing?
They took a big bet on global growth and this would've exploded HC related to sales, marketing, compliance, recruiting, etc. They pulled hiring forward on an expectation that the market advanced 5 years during COVID and now have to cull that new growth. Lots of late stage private companies and recent IPOs are going through the same thing.
More general, we had the 2008 financial crisis after one not too big investment bank went under. Covid did, despite all the real world damage from lost lives to the economy, not doing anything like it. I always wondered why, aparently more free money, on top of all the free money we had since 2008, helped. I just hope that the postponement of hitting a wall doesn't mean we ginna hit it much faster. We'll see...
But you ask how they can productively use the time of 10k people and I think this post is sort of evidence that they couldn't.
Software is supposed to scale almost for free, they don't need people to actually make the transactions and push the bits by hand, this is all automated.
My guess is they have a lot of sales and an enormous amount of overhead.
According to Price's Law about 100 people are doing half of the work, but of course it is difficult to guess which ones and they still need the other half to be there.
They must have changed something either on their product or on their procedures on those 5 years.
Sure, that may be true, but startups don't suffer for lacking of scaling ability.
Software does not scale with changing requirements for free. Full stop.
That's not overhead, it's business.
Software people think that they're crucial. They are in the sense that the thing has to be built.
But if nothing is bought, the business goes under and the software is scrapped.
"The overhead" makes the business work, makes people buy it and continue using it, helps them when they don't know which buttons to push, which integrations to use, etc.
Let's say that each product dev team is about 80 engineers. Let's double that number for support, HR, admin, etc. Let's add a team of 10 people for sales ( not needed for internal products but hey)
Now let's round it up to 200 heads.
That would make 50 large software products, is that right?
I.e. a team that is working on only Facebook Messenger back-end, a team working on Facebook Messenger Front-end, a team working on Friend Recommendation, etc.
Each of these teams is let's say 10 Dev, 2-4 QA, 1 Product Documentation, then all the normal overhead of HR, etc.
I feel like most of you all are unaware of the complexity and scope of Shopify...
The former had some stressed principal engineers, the latter was terribly inefficient and people had 1% productivity.
There is a happy medium, but nobody can manage a large headcounts without splitting in a lot of tiny products.
The core product of shopify is not something that needs 10k engineers for maintenance, even if they can afford that.
Sales and support basically scale arbitrarily large, as long as the market is there.
I'm in a well run, immensely profitable, 100+ yo company, so big a country needs us to run, literaly, and a few others would be destroyed if we suddenly closed shop and ran with the money.
We are 60 000 and feel too fat. I cannot understand what frigging shopify is doing with 10k people. We make 5bn a year profit these days, is shopify close to 1?
Edit: waoh, they indeed were at 3 bn last year, 300mil the year before, -100 mil before, without reading the details. It's not regular profit but if it was, it'd just confirm we're too fat, not them :p
I work for a 100k-employees company. According to the internet, a third of it are engineers.[1] I think I can explain.
First of all, I think the AAA game example is bad. Most of my acquaintances working in the gaming industry work long hours for a crappy salary compared to their skill, because most of them are passionate.
Most business software is written by overpaid engineers who see the whole thing as a 9to5 job. So you can already divide the amount of hour worked per employees by at least 1.5 if not 2.
Even then, if you take something which seems as simple as Shopify the system can be made complex for managers and directors to justify headcount.
It's an e-commerce website, right? So you can split 100 engineers over 5 teams. 10 "production engineers" (or SRE/DevOps/SysAdmins) and 10 software engineers for each team: - Product search team; - Payment team; - Authentication team; - Admin UI team; - CRM team.
Once you have 100 engineers, you can multiply your headcount by 10 by just splitting each of these teams into five more. If you take the Payment team, you can create a credit card team, a paypal team, an alipay team, … For product search, you can create a team to manage just the suggestions of the search bar, another team which optimizes term matching with products, another team which does the list of related products on the side bar, …
I just found jobs for 1,000 engineers, right at the top of my head! Now you have so many engineers and so many customers, you also need internal tools. You need an internal tool to manage customer refunds, customer support, etc… You need HR tools for vacations, performance review, …
Of course all of this comes with waste, but who cares as long as you're offsetting it with your revenue? ¯\_(ツ)_/¯
Anyway, this is why I will never be a business person :) .
[1] https://earthweb.com/how-many-software-engineers-does-google...
This is the problem. IDK about Shopify specificially, but a lot of these companies don't have revenue, or it's far from offsetting their expenses. That was OK as long as more venture funding was readily available; today that's not the case.
If you're looking at big tech, telco, banks and finance, there are a lot of companies where headcount waste is offset by revenue. Many of which are even making profits. According to wikipedia, shopify had a net income of ~$3B for ~$5B of revenue in 2021.
They're likely predicting eCommerce growth slowing a bit (combination of post-COVID & reduced consumer spending), so pushing for better fiscal discipline & improving net margins going forward.
I just got laid off from a ~1.5k-employees private company that applied the same method to split up a large monolithic cash cow (crafted from scratch by a small clique of hackers who met early in life) into microservice and microfrontend internal products because it looked like a good long term plan in Q2 of 2020 and we thought we could scale that forever and start selling our dog food as a service.
Something went wrong, and we hit a ceiling very early. The amount of waste that was generated by the rigid management ecosystem that was created to sustain such a large scale up (for tracking purposes) became so strict that any and all attempts to use the scientific method to solve anything by the then-outnumbered engineering staff became impossible to justify to any non-engineering roles.
If the task didn't fit in a 2 week sprint, it couldn't be planned.
If it can't be planned to be shipped from scratch in a 2 week sprint, from analysis by both your BE and FE devs to both of them shipping at the same time by end of the sprint, it couldn't be done.
If you needed to solve for "what do people wish they could buy?" instead of optimizing for "what are the most humans currently using?", it couldn't be done.
We constantly regretted not sticking to our engineering principles.
The system collapsed. A lot of nice-to-have-but-working-at-a-distance positions were eliminated, as well as a few individual contributors that management hadn't realized were important to their core functions but were hired too recently and didn't have time to adjust to the point system.
I wish I could tell you what happened next, but the layoff happened. Most of us thought it would happen because management would finally realize the (human) system was designed poorly and without a good feedback loop while growth happened. But it turns out they might have only reverted to a previous commit of the organization structure and are still intent on trying again with the same rulebook.
Slower but infinite growth is still the objective, excessive tracking is still the norm.
Their marketing had been doing poorly in recent years, and the layoff wasn't even mentioned in the news, but it seemed like it affected a lot of devs in my neck of the woods despite the near complete lack of media coverage.
Does this happen often? Is this what scaling up always looks like?
Happy marriages are boring; They all look the same.
Whereas each unhappy marriage is uniquely unhappy.
See this video by Casey M. https://youtu.be/5IUj1EZwpJY
I think the complexity demonstrated in your post is a reasonable explainer for why companies like Salesforce and SAS are so highly valued - it stops a lot of those teams needing to exist at companies for which proprietary tech isn't a competitive advantage.
The way the calculus works for Internet-based SaaS is: say you have revenues of $4B (like Shopify), and an engineer costs $400K. If the engineer works on a project that improves sales by 0.01%, it's profitable. If a team of 10 engineers works on a project that improves sales by 0.1%, or 100 engineers improving sales by 1%, it's profitable. How many 0.1% opportunities do you see in the product? How many 1% opportunities? What if you add risk? An engineer might fail to see any effect on 4 of their projects, but if they improve sales by 0.1% on the 5th, they've still made the company twice as much as they cost.
It's hill-climbing. There are usually lots of 0.1% opportunities available with a big worldwide SaaS. Things like localization and entering new markets will generate way more than that; even things like moving around CTAs and changing colors will usually generate more in profit than the engineer costs.
Also add to that diminishing marginal productivity of each engineer. In a team of 5 moving a button around takes an afternoon. In a team of 1000 it often takes a couple quarters, because you need to get sign-offs from all the teams that the code touches, run it through QA, and gather metrics to show you didn't regress anything. The engineer is still profitable, because the effect of their change multiplied across millions of users is way more than their salary costs. But they're not as profitable, because they work so slowly.
At Supercell, they have some old titles generating around 400K of revenue per day, with a minimal team working on new features, fixing bugs, looking after numbers and trends, managing ads... All of that with less than 15 people.
Of course this is not the same scale, but they have a LOT of daily users, and at their peak the company was about 200 people.
And I've been there, I can tell you that there is ample slack, most of them are barely working.
Probably lots of money could be made with better support.
Microsoft seems to do it thr correct way - I worked at a "boring" company that had a lot of licenses and we had highest tier support - we found a bug in Excel (!) and they fixed it.
If you are a small fish you wont get any support and often not give money. I wonder if this doesnt add up.
Microservices.
I haven't worked there, but I've worked at incredibly similar companies with the same scale.
Every single business function split into fine grained services, with teams of size 5-20 (larger teams have split services, oncall, etc.)
Auth, API gateway. Layers of devops teams. Traffic, monitoring, data store, many different analytics support teams. Kubernetes maintenance.
The payments platform is probably huge. The app teams too.
Infosec of various flavors. Vendor integrations...
Think about the sprawling functionality of a company at scale.
Anyone else is sales or support. And other business functions, like various legal departments.
10,000 is the right size for an org like Shopify.
The people on those teams undoubtedly have plenty to work on.
Scale is harder to manage as the userbase grows. A lot of popular services could run on one machine if you can live with 3 nines of reliability and never scale past 100,000 users.
When you reach that scale, you also start doing lots of product work that's either exploratory and unlikely to matter, or micro optimizations trying to move the needle 1%. If you hit a win on one of these, because of your scale, the win can be huge.
I've seen large companies and it's astonishing how little work and how much process they have for minuscole changes.
The only productive way of managing this is do what Google or Amazon do: split in sections and teams and get them to do something independently, with the hope that someone will struck gold. It's a bit like a venture incubator and - sometimes good things come out of it, most of the time dead products come out.
The company where I'm currently in is ~200 engs and a few companies ago with 50 engs was easily 10x more productive and had a way bigger codebase.
Management is either too useless to care / too attached to saying they have N underlings and the business makes so much money they can afford to spend x% on tech workers, just to be safe.
It's like saying, if you are building the next google (early days) you can still easily get cash. Sure but not as much as say 6 months ago. It isn't easier than any time in the last decade - 6 months ago people didn't even do due diligence before the wrote massive checks.
edited: for politeness as per comment.
Companies that have been growing sustainably and building innovative technology that reduces costs 10x (in a recession) get a lot of attention. Especially if they are turning a profit without any accounting tricks.
Companies that were never going to be profitable are having problems raising money now and sounding the horns. There are a lot of those companies, especially on HN, but please don't categorically dismiss my experience as a fantasy.
My comment is and still stands: if you are making something truly amazing then you will almost always find investors (which isn't a good metric). If you were making something amazing 6 months ago you would have gotten more money on more favorable terms. This market isn't easier or friendly at all - investor appetites have changed.
For example the friends I had working in the public sector during 2008 didn't start to get really hit until 2010.
For federal government, it is usually delayed because downturns tend to provoke temporary countercyclical deficit spending, and thus hiring.
For state governments it is often sooner because operating deficits are structurally more difficult for them, so revenue cuts are reflected in spending more directly, though short-term circumstances may be addressed by furloughs, hiring freezes, real pay cuts via wage freezes during inflation, effective (temporary or permanent) pay cuts by altering employer/employee sharing arrangements for benefits, attrition, and other non-layoff means.
(Of course nowhere is entirely safe, even in good times)
And when you cut back on roadmap on a product like that, consolidation starts looking sensible. That’s when you get bought out by Oracle or ADP or someone.
"losing a few big customers could be fatal" For sure, but there's also a long history of enterprise companies weathering this just find (eg Twilio famously churning Uber). There often is just less pullback than one would think as well, it's typical to see 3+ year contracts in enterprise.
If anyone knew what's safe then you'd see investor dollars pouring into those industries right now. At the company level you'll have a much better chance of survival if your company makes a profit (which is frighteningly rare these days). But overall, during downturns, it's only possible to know what was safe when looking backwards.
My experience, having entered the work force in the shadow of the dotcom bust, is that the best path to safety in tech is to be in the highest percentile of skill you can be.
As boom periods extend more and more people flock to tech because of the money. If you were in industry pre-2008 you'll likely recall that most programmers in tech were in it because they had a passion for programming (especially in the growing startup scene at the time). Eventually we get to more recent years when you have boot camps just churning out mediocre devs.
Things were very similar in the dotcom boom, and after it went bust there were many programmers who never went back to programming. And nearly everyone took pay cuts.
One good thing that changes in crashes is people start looking for sincerely good and experienced people more and more. A seasoned dev, who during boom times is an annoying hire when you're just trying to drive up head count, becomes a valuable asset when you need just enough devs to get the job done.
So depending on how bad this gets determines which percentile you need to be in to maximize your probability of keeping your career. A small correction just means the bottom 10% disappear, in more severe cases only the top X% might survive. The other thing that changes is that interviewing will become as challenging as it was for the previous cohorts lower percentile. For example if you're just above average getting a job in the future will feel more like a newbie programmer just out of a bootcamp, if you're in the top 10% and previously didn't have to try to get jobs, it's going to feel more like an average dev struggling with their first leetcode interview.
What do you mean by rare? The biggest employers in the world [0] have massive, healthy profits. I tried to find the biggest company that was money-losing but gave up after looking at the top 25. Even in you look specifically at tech [1] this is true.
[0] https://companiesmarketcap.com/largest-companies-by-number-o...
[1] https://companiesmarketcap.com/tech/largest-tech-companies-b...
> Net loss was $3.8 billion in the first quarter
0.https://ir.aboutamazon.com/news-release/news-release-details...
Just be good at your job. Ive been through many layoff cycles and its be extremely rare to see the good people laid off. Be undeniably the best and you'll always be safe and compensated.
Military industrial complex, as usual.
The physics of civilization and general incompetence of Western leaders is raining cash on these companies, but the demonization of the sector by the globalist elites[1] mentioned above means that they are desperately short for people in every position. From well tech to field IT, to the guys in HQ handling well-management software, all these positions will need to be filled.
It is a boom/bust industry, but it looks like we're about to begin a prolonged bull cycle.
There's very little that is special about their business. They have no great competitive moat. It hasn't even demonstrated good margins ala an eBay. The hype started with Amazon's stock liftoff, which was overwhelmingly due to AWS not retail. Investors went looking for the next Amazon in ecommerce and foolishly bought into the premise that Shopify would be that. Now all the bubbly ecommerce valuations are collapsing, as they should. Stocks like Etsy and Fiverr still need cut in half again at a minimum.
Shopify is worth three to four times sales at most. Compress that further as their growth slows. The stock will stagnate for at least a decade vs the highs it hit during this bubble.
It's interesting how Canada has exactly one each time around; no more, no less. While having one is certainly better than the average of zero for non-US developed countries, and having each be in a different sector is also good, I suspect that each also benefits/benefited from being the hot tech company that those in Canada had to go to if they didn't/couldn't move to the US. (Elsewhere people have mentioned Shopify being known for lowballing salaries.)
>There's very little that is special about their business. They have no great competitive moat.
I don't know. Shopify is known as the company you go to for quickly setting up an ecommerce storefront. Yes, there are competitors, but Shopify seems to be the brand name in the space. Unlike Apple vis-a-vis Blackberry, there doesn't seem to be great risk of someone coming in with revolutionary technology and immense market reach that upsets the field overnight; we're coming up to 30 years after the release of Netscape, after all.
Agreed. I think Shopify is a great product, but they were huge beneficiaries of the COVID-19 lockdowns and Robinhood culture of 2020/2021 (their only profitable years?).
I work with it on quite a high level position and everything about it is plainly terrible: support (terrible, only few people that care can help), management (many promises - zero delivery), tech side (team is suffering from ways their API works).
One solution here is to move from 'at will' employment explicit 'tours of service' [0]. If you had hired a bunch of staff in June 2020 under a 2 year contract, with renewal not guaranteed or even expected, you essentially have a built-in mechanism to match employment to the at-home shopping surge.
If you had thought the pandemic would just be one year, or three, you could write the contract accordingly.
This is probably pretty hard for roles where it takes a while to get up and running, but not so hard for, e.g., sales and operations roles.
I personally would appreciate this because every 1-2 years I yearn for a long break.
[0] https://forum.effectivealtruism.org/posts/waeDDnaQBTCNNu7hq/...
Startup just acquired a competitor and doubled its headcount overnight? Who cares about retraining folks you want to fire after that? You have to reorganize the new merged organization anyways, what better than to realign salaries with existing budgets?
I used to think this way until it happened to me. The CEO didn't care that she was losing a senior technical resource because it wasn't going to be her job to replace me. She found out I was interviewing and fired me because she hated it when people resigned. It was so bizarre, but those people do exist.
While you would, most of the labor sector would not. For me I explicitly reject fixed term contract employment, while on the surface it may seem more ideal, for me At-will employment through out my career has been pretty stable, and normally on the inside I can tell when layoffs are coming, and what segment so will be impacted so I can plan accordingly
Most people want stability. Do layoffs if you need to, but cut once, cut deep, and as Shopify did here, do well by the folks you're letting go. (And then evaluate if you should change your hiring targets to prevent this in the future.)
Aside from the manyfold problems that your ‘solution’ would cause or exacerbate, this shows a remarkable lack of cross-functional understanding. It’s generally assumed it will take 1-2 quarters for sales teams to ramp up, and even the good ones don’t hit their stride until a year in.
It’s also disrespectful to your customers to turn over their sales teams every year or two, as they have to endure 6 months of “I don’t know, let me find out”.
Curious if anyone with more context knows how to interpret that. The obvious one is that they didn't lay off and are still hiring like mad for engineering, but I don't know if that's the right read. Or they just haven't updated their job postings.
Or they actually have fewer engineering positions open than they used to even though it looks like a lot -- most of these positions actually maybe look like "tech lead" positions; it doesn't look like there are any/many standard/non-senior engineer positions open, and I think maybe there were a few weeks ago? Not sure.
Top execs are compensated in stock. Almost all turn around and cash out like a revolving door. They will cause hell to protect their upside over the short term.
https://twitter.com/joeldrapper/status/1551940500814430208?s...
Personally, I haven't bought a single item from a Shopify store. I prefer Amazon because of prime shipping, reviews, and the ability to compare similar products with one single search.
The layoff-consultant folks often say you can drop a third of a company and not see a major difference in performance. If Shopify were struggling, they might have seen if the consultants were right.
That one isn't an accounting quirk. Nor is the wall that their sales growth just ran into. The pandemic pulled future results forward by many years, Shopify will suffer near-term accordingly.
- Received a clearly counterfeit product (not even a good attempt at a fake)
- Received a product that looked nothing like the description with a note included offering me a $10 Amazon Gift card for providing proof of giving the seller a 5 star review. I reported this to Amazon and no action was taken.
- My last order, the product never even arrived. No response from the seller despite repeated attempts. (In Amazon's defence, a refund was quick and painless once the 2 week waiting period ended)
In all of these cases, the sellers had thousands of 5 star reviews. I feel a turning point will come where Amazon will either have to do some major housecleaning to fix the gaming / fake reviews, scams, and counterfeit products that infest their entire business, or customers will reach a breaking point and leave en-masse.
Unless you literally only buy from Amazon, you probably wouldn't be able to tell. They are white labeled. https://store.ui.com is one for example.
https://news.shopify.com/shopify-completes-acquisition-of-de...
This actually works out fairly well for everyone - some people get hired and stay because they're good, some get hired and then dropped but they earn well and get a big name on their resume for their time, and the company eventually builds a stronger team.
Otherwise people will always go into voodoo practices trying to avoid the inevitable failures.
Layoffs are not always about reducing the size of the workforce, but can also be to remove the low performers.
The only thing saving many high performers was better understanding of the company direction. Meaning a lot of the good folks figured out the “safe” teams/organizations and transitioned shortly before the lay off occurred.
https://mobile.twitter.com/joeldrapper/status/15519405008144...
"The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke. “We’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products,” he wrote. Staff who are being let go will be notified on Tuesday."
> ”The Ottawa-based company will cut jobs in all its divisions, though most of the layoffs will occur in recruiting, support and sales units, said Mr. Lütke.”
I'll counter though that I don't think its about pricey severances but more related to keep core products operating and being built for the future. Lutke comes from software engineering.
I said that all these layoffs are not firing many, if any, software engineers. They replied that, while that’s true, tech companies are not firing software engineers, they are on a hiring freeze and canceled offers that were out. So not firing, but not hiring any either.
But if basically every company is doing a hiring freeze, and employees are unable or unwilling to quit because of bad economic conditions, maybe less so.
Tobi removed all the NFT stuff from his Twitter profile and didn't tweet much about it for months now, after being pretty vocal about it until earlier this year.
Would love to hear his real thoughts on it and why he/they even (seemingly) invested so much into it. One of the few things I never got about Tobi / Shopify. Just seemed so late and weird to be so bullish there. Don't think he's the kind of person to push it just for personal gain, nor that he'd have to, but ...
spoiler: shopify isn't done yet with layoffs, it will go down as another Canadian failure (lots of those in this country)
It's counterparts have far bigger amounts and most of its customer base are affiliate markters, drop shippers.
Why?
Transactions on a few thousand NFTs per day is meaningless (yes volumes that low). So there’s no other option than Shopify actually believing NFTs were a real viable, long term business.
That follows from what you said before. I have yet to see anyone not a scammer who understands them but still thinks they are great.
And I say that as someone who’s vastly more into crypto than the extremely anti-crypto HN.
I was surprised by what NFTs really are... it is so simple it is stupid. It is just some "standard" Solidity/EVM functions that you have to follow when writing your Smart Contract, and then it's an NFT. I don't know why I thought it was going to be something more complicated.
At the end we just made our custom Solidity contract tailored to what we needed. We didn't need the whole NFT functionality (we just needed to store a bunch of hashes in an IFPS file and "imprint" the hash of the file in a Smart Contract Key/Value map. Adding some authentication to operate the smart contract.
I agree by the way, it's just I hesitate a bit because a lot of people speaking positively of NFTs were too smart to be mindlessly bullish. I suspect some of them thought it would make for positive press and drive some hype. Like with Elon and Bitcoin/Dogecoin. I'm convinced 90% of the stuff he says and does is to keep Tesla and himself in the news.
The connotation that no news is bad news is just such a sad statement on the human condition. If you're in the news for wrong reasons with negative connotations && still maintaining an overall positive image, then WTF is wrong with people?
When a particular individual continues to be theirself in public like this, each instance makes me think less and less of them. It then starts to reflect on the compan[y|ies] they represent. I used to regard Tesla very highly, but no longer. The more they focus on FSD and stop progressing EV cars more in general, the less I care about Tesla. To the point now, I no longer consider them as a car I'd like to buy. I'm still holding onto liking SpaceX notwithstanding the CEO.
I kind of wish I kept note of everyone who took part in the scam. It will be easy to forget once everyone scrubs their profiles clean.
But even this means they fell for it. There’s very little money in providing access to NFTs in the short term. The money is made by dumping over hyped projects (ex: anything BAYC puts out).
What Shopify probably saw were the transaction amounts that OpenSea was doing, and thought they could jump on that business thinking it was any sort of long term model. They “fell” for it because they thought building a branch of their business out for NFTs was a good idea. Anyone could have seen this was a bad idea, and not a great way to make money, and also something that would die and fall apart in a few months.
This isn't strictly true -- marketplaces take a cut of the fees, and there was a lot of ETH sloshing around at one point.
I don't understand those that are vocal with public "threats" like the above.
I remember friends on Facebook with the same idle threats about those not wearing mask. Or those that voted for Trump.
"I see you! I will remember this!"
Ok.
I unfollowed a lot of people over the last year who had turned to pushing scams. The problem is, my memory is short. I'll soon forget who the scam artists were, and, if they scrub their profiles clean, I'll probably end up following them again.
The faster we collectively understand the above, the faster we can actually implement in solutions to do what we can to prevent scammers and also lift the shame from people who are victims.
An NFT is just an NFT and has no plausible way to be worth anything.
I think what it really boils down to is that, in the "real world", consumers are willing to pay many, many millions of dollars solely based on provenance. That is, one mediocre painting may be worth a couple hundred dollars, but if it can be validated that the painting was actually painted by some famous (dead) grand master, that painting is now suddenly worth millions of dollars, even though nothing about that painting has changed.
So, what NFT boosters were arguing was that, if people are willing to pay millions of dollars for provenance in the physical world, why not the digital world? In my belief it's that humans have evolved to view 2 distinct physical object, even if they are exactly the same, as separate - an exact copy of a painting so that it is indistinguishable from the original to the human eye would still be a different painting and not have the provenance of the original. For digital jpegs, we don't view them that way - the same image on two different monitors is "the same image". For physicists out there it's kinda like the difference between fermi dirac statistics and bose einstein statistics.
Thus, while I agree that NFTs are all scams, I think we should also be asking the question of why we are willing to assign so much value to provenance in the physical world - that seems crazy to me, too.
For physical objects, scarcity is an unescapable fact. It would be great if we could right-click on some Michelin starred chef's food and have another copy of it, but we can't.
NFTs unnecessarily add artificial scarcity to something that didn't really need it.
The scarcity is not in the image itself, it is in a combination of image + canvas.
I disagree. It is pretty possible now to create a replica of a painting that would be indistinguishable to the human eye from a distance of, say, 2 feet.
Yes, the object could still be distinguished by other means, but presumably the only reason we enjoy art like paintings is for their visual effect - there is literally no other reason to appreciate it.
So my point is that the scarcity for the reason we value it in the first place is actually not an inescapable fact for something like a painting.
Arguably, however, someone wanting to own the original painting by a well regarded artist (say a van Gogh) you're stepping into Veblen goods territory[0] as its a display of wealth, status and prestige. This is what NFTs are trying to achieve
But when we’re talking about very expensive paintings, the physical scarcity of the raw materials plays essentially no role in the valuation. Provenance is everything. Sure, the canvas and paint is scarce, but the cost of canvas and paint is vanishingly small. Make no mistake, provenance is the reason people pay lots of money for original paintings.
Artificial scarcity is merely a signal/status booster in a virtual world where post-abundance is present.
If you are in a VR world and want to mingle with other fellow “tribe members”, what signal do you go off of that’s hard to replicate?
Collectable markets behave fundamentally differently from utility good markets so it's often hard to reason about them when you try to apply logic from one type of market to another.
The ill-informed association of wealth and genius are age-old and in many ways a necessary ingredient for a bubble to form in the first place.
The same is true on the way down by the way. People nobody listened to because they were incorrectly bearish in a bull market are suddenly entrusted. People who were bullish are disregarded. People believe any scary narrative associated with declining asset prices. This process plays out in a fraction of the time.
Likely that a lot of these "smart" ceos are people that were in the right place at the right time that fortunately had hired the right people that drove their success. To them the internet was a golden goose. Maybe NFTs are the next golden goose? They're running on pure hopium trying to cargo cult their way into their next billion and not really understanding anything about how they got there.
I think he did believe in it, but that's independent of the fact that acting quick on this made him a good chunk of cash with very little effort.
Is that sustainable? of course not. It's also not my particular cup of tea as far as making money goes, but I would hardly say he's "not smart" for getting involved when he did and turning a quick buck.
Remember CryptoKitties? The first NFT game before it was called NFTs. Someone made a game where you bred dragons, but in order to do so you had to feed them CryptoKitties. That's the type of stuff I like, not the play-to-earn crap.
The issue is the market growth that Shopify saw at the beginning of the pandemic is pulling back. And also we are likely entering into a recession which will also hit them. I am surprised they didn’t cut deeper.
This is a key insight. The Shopify powered shops I buy from are luxury expenditure. The small producers who make nice stuff at high prices. The last couple of months I've been buying significantly less from them as inflation has cut into disposable income and, where I need a product, buying a cheaper alternative from eBay or Amazon.
If others have been cutting back extra expenditure like I have, that's going to compound the post-pandemic online shopping slump.
No mention of NFTs, though wouldn't be surprised if they scale back on that. I _would_ be surprised if they drop support and development for them completely.
To blame 'unforeseen' waning pandemic growth seems like a copout by management (not surprising)
It's just better to be a hyper bull and optimistic and get lucky and be right.
But maybe they expected the pandemic to last for the rest of our lives.
During lockdowns a lot of people moved their shopping online. When lockdowns lifted some shopping moved offline.
Also during lockdowns, lots of people tried their hand at online sales. Some worked, some didn't.
The letter is actually very direct, with little PR speak. Generous severance benefits too. As far as layoffs go, it's way more responsible than normal.