When John was reassured by management at the $56 billion (€51.6 billion) valued tech company Shopify that no more workers would be laid off after 10 per cent of staff worldwide were let go last summer, he believed them.
“There was a kind of a promise from the company, as if you can make such a promise, that there wouldn’t be any further lay-offs,” recalls the tech worker based in the west of Ireland. “But of course, there were.”
He was let go weeks later.
The drip feed of redundancies and wider malaise within the ecommerce giant as it struggles with internal controversies and begins to incorporate artificial intelligence into its customer service underscore broader risks to the Irish economy from the tech downturn.
The bulk of the 651 employees of Shopify’s Dublin-based subsidiary Shopify International Limited in 2021 were in sales and marketing roles, according to its company accounts.
It’s like: two staff are gone this week. Three staff are gone next week. Five staff are gone the week after... it’s a continuous drip feed of people being let go— John, one of many redundant Shopify workers
When their jobs go, they are not always easily replaced: many Shopify employees are based in Connacht and Munster, some in small villages – the legacy of the company’s initial launch in Galway and its fully remote working policy.
Despite the company’s reassurances after it imposed the worldwide mass redundancy in July, people continued to be let go in Ireland in batches throughout autumn and winter as they were told their roles had been scrapped.
Clusters of long-time staffers were let go in October, December, and February, according to eleven statuses posted on LinkedIn by workers who wrote they had been abruptly made redundant by Shopify and were now looking for new roles, which have been confirmed by The Irish Times. Several stated that their whole teams had been axed.
“It’s like: two staff are gone this week. Three staff are gone next week. Five staff are gone the week after... it’s a continuous drip feed of people being let go,” John said.
Shopify did not respond when asked how many employees in Ireland had been made redundant and declined to make a representative available for interview.
“Since our July ‘22 reduction in force, there have been a small number of exits, which are commonplace in any large organisation and are a confidential matter concerning each individual employee,” a spokesman said in an emailed statement.
Internally, employees have come to dread the appearance in their calendar of an unexpected meeting – the sign that they are about to join the ranks of those made redundant.
Ann realised something was wrong when a co-worker did not show up for a meeting, and she discovered her co-worker’s profile had been “deactivated”.
“Deactivated only meant one thing – deactivated meant not in the company any more,” Ann explained.
With a growing sense of forboding, she then noticed that a meeting had been scheduled into her co-worker’s calendar just before her disappearance.
“I was like: f**k,” Ann remembers. “I told the guys: I think I’m going to be gone in half an hour. Because I have the same meeting.”
Former staff quoted in this article have used pseudonyms because they believe themselves to be forbidden from talking about the company by non-disclosure agreements. They were among the waves of people to be let go from Shopify over the winter, and many of them had been with the company for years.
John’s years-long tenure at the company came to an end “very abruptly”. He found himself instantly locked out of the company’s systems and unable to say goodbye to his colleagues.
“I got a ping on Slack from a person I’d never heard of before. She informed me that that was going to be my last day at Shopify. My role had been made redundant. And that was that,” he recalls.
Those still working within the multinational describe a tense and fearful atmosphere at the company as employees struggle to cope with the remaining workload and learn of new redundancies when co-workers disappear from messaging system Slack.
“Since those lay-offs, the culture there and the environment has completely changed. Everyone’s anxious all the time,” says Niamh, a former Shopify employee in a small town who abruptly found herself reliant on social welfare over the winter.
Shopify caught the updraft of the boom in online shopping caused by Covid-19, reporting an ‘exceptional year of growth in revenue’ in 2021
“You wonder: am I going to be let go today? Am I going to have a random meeting scheduled into my calendar, and will that be it? It affects your performance, and it affects your outside life as well, because you’re thinking about it all the time.”
Shopify caught the updraft of the boom in online shopping caused by Covid-19, reporting an “exceptional year of growth in revenue” in 2021 due to the fees merchants pay to build shops on its platform and the cut it takes from their sales.
The annual accounts of its Dublin-based subsidiary Shopify International Limited show a 2021 profit of $1.125 billion, almost double the previous year, and reported that staff numbers had growth to 651 from 442 the previous year.
In 2022, the turbulence hit. A dramatic slide in the company’s share price spooked its senior executives. In May, it reported its slowest quarterly revenue growth since going public in 2015.
In June, shareholders voted to entrench the control of co-founder and CEO Tobias Lütke by approving his 40 per cent “founder share”. The lay-offs came a month later, and were followed swiftly by a corporate shake-up.
Behind the scenes, company morale has also been sapped by a long-running internal controversy over whether Shopify should deny services to customers with controversial views, such as the influential account Libs of TikTok.
The account gained notoriety for instigating social media pile-ons on schools and teachers in the United States who include LGBT content in curriculums, and sold mugs and T-shirts reading “stop grooming our kids” on a Shopify-hosted online store.
In 2022, progressive media and advertising watchdogs publicly pressured Shopify to drop the client, arguing the account violated the company’s acceptable use policy, which states that the company’s services cannot be used to “promote or condone hate or violence” against people based on race, gender, sexual orientation or any other kind of discrimination.
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The company’s position was that Libs of TikTok did not violate the policy, and in November Lütke accused “pressure groups” of trying to influence how the rules are applied.
Inside Shopify, internal staff LGBT chat groups lit up with posts from upset employees after this statement from the CEO, according to posts seen by The Irish Times.
“Why are the lives and safety of our community not more important to the company we are a part of?” one staffer wrote.
The issue has damaged morale in a company once renowned for good benefits and an upbeat work culture that inspired employee loyalty, and some current employees are looking for options to leave.
A series of excited statements by company executives about the potential applications of artificial intelligence and the company’s recent addition of language bot ChatGPT as a customer assistant have further alarmed some staff about potential replacement.
So has the company’s use of external contracting services. Screenshots of external systems seen by The Irish Times show that even while the company was laying off staff, it was making multiple hires from the outsourcing and offshoring external contractors TaskUs and 24-7 Intouch.
In February, CEO Lütke posted a chart on Twitter showing the plunging number of employees required by the largest US firms to generate €100 million in revenue. “More with less,” it read.
One long-time Shopify staffer recalled the moment he received a companywide email last July from the CEO.
In it, Lütke informed employees there would be a “reduction in workforce”, whittling down duplicate or non-essential roles, and that 10 per cent of them would “leave by the end of the day”. He signed off “Tobi”.
The staffer remembers thinking he should escape the cuts, reasoning that his team was understaffed and had recently added a new hire who he assumed would be first in line to go.
But he realised his error when he discovered he could no longer access the software required to do his work.
“I started getting locked out. I thought okay, this is it. I’m one of them,” he remembers.
Under Irish employment law, companies with more than 300 staff that lay off 30 or more must engage in a consultation process with employees’ representatives 30 days before letting anyone go, and must notify the Government of a “collective redundancy”.
The company must also use a “fair and objective” method to select those who are laid off.
Several former Shopify employees say they believe that Shopify did not follow the correct procedure, and explored the option of redress through the Workplace Relations Commission.
In response to questions, a spokesman said that “Shopify has not had a collective redundancy in Ireland”, indicating the company does not consider those rules to apply.
The company declined to disclose how many employees in Ireland were affected by the 10 per cent cut in global staff.
Merchants seeking technical support to run their shops ‘are waiting in support queues for far too long’ and customer satisfaction was falling
A spokeswoman for the Department of Enterprise, Trade and Employment said it had not received a collective redundancy notification from Shopify, and noted that it was “not required to be notified” if a company with more than 300 employees makes fewer than 30 people redundant within a 30-day window.
On March 1st came signs that the redundancies were beginning to hit the company’s ability to manage its customers’ demands.
In an update posted internally, seen by The Irish Times, chief revenue officer Bobby Morrison declared a “Code Yellow” due to customer service levels “that have deteriorated beyond acceptable ranges”.
Merchants seeking technical support to run their shops “are waiting in support queues for far too long” and customer satisfaction was falling.
“Worst of all, we can’t really tell what is happening because our data systems are broken and lacking real-time analysis,” he wrote, calling on employees to “lean in” to help fix the problem.
The response was cutting. “Do you think some lay-off[s] might have had a negative impact on our product?” asked one employee in a reply that received dozens of likes.
“We are looking into everything,” replied Glen Worthington, the company’s vice-president and chief of staff.
Another employee disclosed in response that they had had “to go on medication from the anxiety and mental load” of the work.
“You’re not the only one,” a co-worker replied.
One of the most liked replies was by an employee who advised the chief revenue officer to hire more staff.
“When we weren’t on back-to-back calls and three chats non-stop all day, our support queues were manageable and both sides of the interaction left happy and fulfilled. We have yet to find a healthy equilibrium since July of 2022... and we’re burning out because of it,” he warned in a reply that received over one hundred likes.
“As more people burn out and take [personal time]/leave, the queues get worse,” he continued. “It’s a vicious downwards spiral.”