A $US40 billion global e-commerce giant has left Australian staff devastated after they woke up to find they had been made redundant in a late night email that came just weeks after some went through a restructure.
Shopify, which creates the software that runs many online stores including JB Hi-Fi, cut about 10 per cent of its 10,000 global staff on Tuesday night. The company had expanded rapidly during the pandemic-fuelled internet shopping boom only to run into a sharp market downturn.
Tobias Lutke, the founder and boss of Shopify, informed staff that one in ten would be leaving via an email that landed late at night, Australian time.Credit:Bloomberg / Cate Dingley
One Australian employee affected by the layoffs said he was gutted to wake up to find his Slack workplace messaging system showing a heart emoji and the word “farewell” — the first sign something was amiss.
“There’s been a lot more process over there [in North America],” the former employee said, speaking on condition of anonymity to preserve job prospects. “But nothing here. Nothing. We’re all talking to each other trying to figure out what’s going on.”
A raft of major technology companies and start-ups have made staff redundant this year as the market plunges, with most staff being understanding. However, Shopify’s decision to inform its Australian team via email late at night to coordinate with teams overseas have sparked a different reaction.
“We thought we had survived a re-organisation” an employee said. “There’s a lot of anger as well, some of the others I’ve spoken to were crying.”
All staff received an email at about 10.30pm on Tuesday night from Shopify’s founder and global chief executive Tobias Lütke informing them that the Canadian-headquartered company was making cuts globally.
Shortly after, staff affected received a second email arrived from chief operating officer Toby Shannan entitled: “Your role has been impacted by today’s changes”.
Both men are based overseas, though Shannan’s email, seen by The Sydney Morning Herald and The Age said there would be information sessions on severance packages, a helpline for mental support and a dedicated Slack instance to say goodbye to colleagues. Australian staff were offered slots to talk to managers or HR on Tuesday.
Ultimately, placing this bet was my call to make and I got this wrong,
Ian Neil, SC, an employment law barrister, said Australia’s national employment standards had redundancy rules for staff who do not have redundancy provisions in union-negotiated agreements, industrial awards or their contracts. Consultation requirements are minimal, though in some circumstances unions have to be notified, and payout starts at four weeks after a year of service, rising to 16 weeks after nine years at a company.
Shopify, which has seen its shares plummet about 80 per cent from a high late last year of $US170 ($245), is offering a comparatively generous 16 weeks’ pay, plus another week for each year of service. It has promised to let staff keep company-bought home office furniture and to remove “equity cliff” rules that can stop former employees keeping shares in the company.
A spokesman for Shopify referred to Lütke’s email to staff, which the company also posted publicly, when contacted for comment. He would not answer questions about how many people Shopify employs in Australia or how many had been laid off.
Lütke said Shopify had hoped that the lockdown-driven surge in online shopping would be permanent. It was not.
“Ultimately, placing this bet was my call to make and I got this wrong,” he said in the email.
“Now, we have to adjust. As a consequence, we have to say goodbye to some of you today, and I’m deeply sorry for that.”
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