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‘Some of you will leave Shopify today’: What to know about the tech giant’s latest layoffs



Two and a half months ago, Shopify Inc. president Harley Finkelstein said the company wasn’t planning any more layoffs after slashing 10 per cent of its workforce the previous summer. Yet, following first-quarter earnings on May 4, Shopify announced it was cutting 20 per cent, or more than 2,000, staffers as it sheds a strategic part of the business once meant to expand the company beyond digital e-commerce products.

Here’s what you need to know.

What happened?

On May 4, Shopify released first-quarter financials that showed the company earned $1.5 billion in revenue for the period ending March 31. The company beat analyst consensus on its revenue by 5.1 per cent, ATB Capital Markets Inc. analyst Martin Toner said in a note to clients.

In a separate letter, linked to the financials report, Shopify chief executive Tobias Lütke announced more layoffs and the sale of its logistics unit to Flexport Inc., a supply chain management and logistics company based in San Francisco. “After today Shopify will be smaller by about 20 per cent and Flexport will buy Shopify Logistics; this means some of you will leave Shopify today,” he said.

As of Dec. 31 last year, Shopify had more than 11,600 employees, according to its website. A 20 per cent reduction in staff equates to around 2,300 positions, based on the latest headcount. The company said it would not disclose exact numbers.


Shopify’s e-commerce focus

Shopify leadership said following the first-round of layoffs that the reductions would help the company refocus on e-commerce. Since those cuts, Shopify has announced new partnerships, a flurry of product and software updates for customers and a significantly higher pricing plan. It also purchased a logistics company, Deliverr Inc., for US$2.1 billion last July, in a bid to build a fulfilment business internally, part of a renewed strategic plan to get into the delivery space, much like Inc. The deal came just weeks before Shopify announced it would lay off around 1,000 staffers.

On May 4, Shopify said it sold Deliverr to freight forwarder Flexport in an all-stock deal in exchange for a 13 per cent stake in the startup, which it has previously invested in. Flexport was last valued at US$8 billion in a US$935-million funding round led by Andreessen Horowitz and MSD Partners in February 2022.Lütke, in his May 4 letter, said the pursuit of building logistics infrastructure was a “side quest” for the company and that its main mission is “to make commerce simpler, easier, more democratized, more participatory, and more common.”

Shopify began building its logistics business in 2019, calling it Shopify Fulfillment Network. In the company’s management discussion and analysis (MD&A) for its fourth quarter, ended Dec. 31, Shopify said it expected to continue investing in the logistics arm of the business, but it identified its ability to “successfully scale, optimize and operate Shopify Fulfillment Network” as a risk factor.

In the most recent MD&A, Shopify Fulfillment Network was no longer listed as a risk factor and the business overview section stated the company sold the “majority” of its logistics business.“They’re basically admitting that it’s better to partner on fulfilment than do it themselves,” Toner, the analyst, said by phone.

Shopify’s performance

Shopify is one of the biggest technology companies to come out of Canada. In its latest earnings, the company reported gross merchandise volume was up 15 per cent year over year at $49.6 billion. In other words, it handled more than $49-billion worth of goods on its online platform, which allows business owners and companies to host their e-commerce business.

In 2020 Shopify became Canada’s most valuable company by market cap, overtaking Royal Bank of Canada. In November 2021, its share price peaked about $200, before bottoming out in October 2022, around $35 as it became evident e-commerce was losing its lustre.

In July, Lütke said the company made a bet at the height of COVID-19 that e-commerce would take off. “It’s now clear that bet didn’t pay off,” he wrote in an email to staffers, published online.

Investors happy

Investors have responded positively to the news, Toner said.

“The headcount reductions have positive implications for their path to profitability,” he said. ” (In) the fulfilment effort, there was a lot of opportunity but there was a lot of risk. And I suspect investors would prefer that Shopify pursue delivering fulfilment solutions to their merchants in this lower risk way.”

Shopify shares closed the day at $77.65 in Toronto May 4, up more than 23 per cent from the previous market close.

By early afternoon, shares of Shopify climbed more than 22 per cent. The stock price was $77.46 as of 1:22 p.m. in Toronto.

With additional reporting from Bloomberg and Reuters


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Suncor to cut 1500 jobs by end of year, employees informed Thursday – CTV News Calgary



Suncor Energy Inc. says it will cut 1,500 jobs by the end of the year in an effort to reduce costs and improve the company’s lagging financial performance.

Spokeswoman Sneh Seetal confirmed the cuts, saying they will be spread across the organization and will affect both employees and contractors.

Seetal says employees were informed of the cuts in a companywide email from Suncor CEO Rich Kruger earlier this afternoon.


Suncor has been under pressure from shareholders – including activist investor Elliott Investment Management – to improve its financial and share price performance, which has lagged its peers.

Kruger, the former CEO of Imperial Oil Ltd., took the reins at Suncor earlier this spring and has been tasked with turning around the oilsands giant.

Suncor employs people across the country, in the U.S., and the U.K. Its corporate head office is located in Calgary.

This report by The Canadian Press was first published June 1, 2023.

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Amazon ordered to pay more than $30M for privacy violations related to Alexa, Ring devices – CBC News



Amazon agreed Wednesday to pay a $25 million US civil penalty to settle Federal Trade Commission (FTC) allegations it violated a child privacy law and deceived parents by keeping for years kids’ voice and location data recorded by its popular Alexa voice assistant.

Separately, the company agreed to pay $5.8 million US in customer refunds for alleged privacy violations involving its doorbell camera, Ring.

The Alexa-related action orders Amazon to overhaul its data deletion practices and impose stricter, more transparent privacy measures. It also obliges the tech giant to delete certain data collected by its internet-connected digital assistant, which people use for everything from checking the weather to playing games and queueing up music.


“Amazon’s history of misleading parents, keeping children’s recordings indefinitely, and flouting parents’ deletion requests violated COPPA (the Child Online Privacy Protection Act) and sacrificed privacy for profits,” Samuel Levine, the FTC consumer protection chief, said in a statement. The 1998 law is designed to shield children from online harms.

FTC Commissioner Alvaro Bedoya said in a statement that “when parents asked Amazon to delete their kids’ Alexa voice data, the company did not delete all of it.”

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The agency ordered the company to delete inactive child accounts as well as certain voice and geolocation data. That order will apply to Canadian customers, as well, the company confirmed in an email to CBC News. 

Amazon kept the kids’ data to refine its voice recognition algorithm, the artificial intelligence behind Alexa, which powers Echo and other smart speakers, Bedoya said.

The FTC complaint sends a message to all tech companies who are “sprinting to do the same” amid fierce competition in developing AI datasets, he said.

Amazon said last month that it has sold more than a half-billion Alexa-enabled devices globally and that use of the service increased 35 per cent last year.

A black device with the word Amazon on it hangs beside a door
Amazon has agreed to pay $5.8 million US in customer refunds for alleged privacy violations involving its Ring doorbell camera. . (Jessica Hill/The Associated Press)

Hackers able to access Ring accounts

In the Ring case, the FTC says Amazon’s home security camera subsidiary let employees and contractors access consumers’ private videos and provided lax security practices that enabled hackers to take control of some accounts.

Amazon bought California-based Ring in 2018, and many of the violations alleged by the FTC predate the acquisition. Under the FTC’s order, Ring is required to pay $5.8 million US that would be used for consumer refunds.

Amazon said it disagreed with the FTC’s claims on both Alexa and Ring and denied violating the law. But it said the settlements “put these matters behind us.”

“Our devices and services are built to protect customers’ privacy, and to provide customers with control over their experience,” the Seattle-based company said.

In addition to the fine in the Alexa case, the proposed order prohibits Amazon from using deleted geolocation and voice information to create or improve any data product. The order also requires Amazon to create a privacy program for its use of geolocation information.

The proposed orders must be approved by federal judges.

FTC commissioners had unanimously voted to file the charges against Amazon in both cases.

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Stocks slide as debt ceiling vote looms, jobs data stays hot : Stock market news today



US stocks closed lower Wednesday as investors kept a watchful eye on the prospects for the debt-limit deal in an expected House floor vote. Meanwhile, strong US jobs data and China’s economic woes pressured global markets.

The S&P 500 (^GSPC) fell 0.60% while the Dow Jones Industrial Average (^DJI) dipped 0.40% or more than 130 points. The technology-heavy Nasdaq Composite (^IXIC) slipped 0.63%.

US bond yields weakened as investors fretted over the potential impact of the debt-limit deal and reviewed the release of fresh jobs data. The yield on the benchmark 10-year Treasury dropped to 3.62%. The two-year note yields, which are more rate sensitive, slipped to 4.3%, while that on the 30-year bond dropped to 3.84%.

Equities lost steam as the Labor Department reported the number of job openings rose to over 10.1 million, up from economists’ expectations of 9.4 million openings.


The figures underscores “the tightness in the labor market is unlikely to fall off a cliff but rather continue downward on a bumpy path,” Oxford Economics wrote in a note on Wednesday. “While there are some concerns over the veracity of the JOLTS survey due to historically low response rates, the upshot remains that labor market strength remains robust.”

In light of recent economic data, markets are pricing in an increase of 25 basis points in interest rates from the Fed at policymakers’ meeting on June 13-14. On the commodities side, the dollar index rose, while crude oil slid below $70 a barrel.

Still, investors are still very keen on the latest developments in Washington. The debt ceiling agreement negotiated by President Joe Biden and House Speaker Kevin McCarthy passed its first key test on Tuesday when it gained approval from the Republican-led House Rules Committee despite opposition from hard-liners. That cleared the way for the deal to go before the House on Wednesday.

The clock is ticking down, as Congress must race to pass the deal to avoid a catastrophic default by June 5. That so-called X-Date is when the US will run out of money to pay its bills, Treasury Secretary Janet Yellen has warned.


Republican House Speaker Kevin McCarthy speaks to the press after a meeting with President Joe Biden on debt ceiling in Washington, D.C., the United States, May 22, 2023. The United States is Republican House Speaker Kevin McCarthy speaks to the press after a meeting with President Joe Biden on debt ceiling in Washington, D.C., the United States, May 22, 2023. The United States is
Republican House Speaker Kevin McCarthy speaks to the press after a meeting with President Joe Biden on debt ceiling in Washington, D.C., the United States, May 22, 2023. (Photo by Aaron Schwartz/Xinhua via Getty Images)

Meanwhile, both Federal Reserve Governor Philip Jefferson and Philadelphia Federal Reserve President Patrick Harker signaled Wednesday that the central bank could pause rate hikes at its next policy meeting. Separately, the economy showed signs of cooling as hiring and inflation slowing, the Federal Reserve said in its Beige Book survey of regional business contacts.

Elsewhere, China’s factory activity slumped to its weakest level for a second straight month, another sign its post-pandemic economic recovery is losing steam. Asian markets tumbled after the release of the data.

On the housing front, mortgage demand dropped to its lowest level since March, while refinancing activity also dampened to another low, the MBA data showed Wednesday.

Meanwhile, in corporate news, Hewlett Packard Enterprise Company (HPE) sank more than 7% after the company posted a revenue miss in its second quarter earnings and slashed its full-year sales guidance.

Still, the run-up in stocks linked to AI was losing momentum, after the buzz around the technology helped boosted the Nasdaq 100 Index (^NDX) on Tuesday. Shares of ChargePoint Holdings, Inc. (CHPT) was flat, while, Inc. (AI) dipped more than 8% Wednesday.

In single-stock moves, SoFi Technologies, Inc. (SOFI) shares rallied more than 15% in the wake of the debt ceiling deal. The bill would reinstate government student loan repayments, benefiting the online personal finance company.

Shares of HP Inc. (HPQ) sank more than 5% after the computing giant posted better-than-expected quarterly earnings on Tuesday, but reported sales that fell more than analysts estimated.

Intel Corporation (INTC) shares rose more than 4% after the chipmaker said current quarter revenue is on track to be at the high end of its guidance.


Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv



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