Canadian e-commerce company Shopify announced that it would lay off 20% of its workforce, or about 2,300 employees, amid positive earnings reports that had beaten Wall Street expectations. The move sent Shopify’s stock price up, but also raised concerns about the future of the company and its plans for expansion.
Included in the announcement was news that the company had found a new owner for 6 River Systems, a warehouse automation firm that Shopify purchased in 2019 for nearly half-a-billion dollars. The timing of the sale was fortuitous, as the pandemic has led to increased demand for e-commerce and logistics services. However, Shopify ultimately decided to cut 6 River loose due to broader losses.
Shopify CEO Tobias Lütke did not address the sale directly in his open letter announcing the layoffs, but he did mention the related sale of Shopify Logistics to Flexport, noting that the company’s main quest is to “make commerce simpler, easier, more democratized, more participatory, and more common.” He also spoke about the dawn of the AI era and the new capabilities that it unlocks, hinting at Shopify’s plans to continue innovating and improving its platform.
Ocado Group, an English grocery technology licenser, will become the new parent of 6 River Systems. Ocado CEO James Matthews praised the acquisition, stating that it brings “exciting new IP and possibilities to the wider Ocado technology estate, as well as valuable commercial and R&D expertise in non-grocery retail segments.” Matthews also noted that 6 River Systems’ Chuck robots are currently deployed in over 100 warehouses worldwide, with more than 70 customers.
The deal has raised questions about the future of 6 River Systems and its relationship with Shopify. 6 River co-founder and former Shopify Logistics VP Jerome Dubois recently stated in an interview that the robotics firm had struck a deal with Shopify that allowed it to continue supplying systems to customers, including Ocado. However, it remains to be seen how the acquisition will impact 6 River’s growth and expansion plans.
Overall, the news of Shopify’s layoffs and the sale of 6 River Systems has left many in the industry wondering about the company’s future direction and priorities. As e-commerce and logistics continue to evolve, Shopify will need to adapt and innovate in order to stay ahead of the curve.
