Shopify stock unravels on news of global layoffs
Yahoo Finance Live's Dave Briggs look at Shopify's stock amid news of the e-commerce company's plans to lay off 10 percent of its global workforce.
Video Transcript
DAVE BRIGGS: My play, Shopify. Shares getting crushed today on news the Canadian e-commerce company will lay off approximately 10% of its global staff after making the wrong bet on how long the pandemic-fueled surge in online shopping would continue. The CEO, Tobi Lutke, taking full accountability here, though, saying, quote, "ultimately, placing this bet was my call I got to make, and I got this wrong." You got to like the accountability there.
Shopify just the latest tech firm to announce plans to cut staff or pull back on hiring over inflation concerns, rising interest rates and recession fears. Shares of Shopify, SHOP, now down 14% on this day and a staggering 77% year to date, just another pandemic play getting hammered today, Rachelle.
RACHELLE AKUFFO: I mean, it's interesting. Obviously, the pandemic was really a black swan event. So to see so much extra hiring during that period, it was really a matter of time before it was going to fall off. And people were starting businesses. They were loading up on Shopify. And they really thought this e-commerce boom, limited to Shopify, was really going to last, he said perhaps would change things for the next 5, 10 years.
But as people get more back into stores, they're starting to look at other brick and mortar businesses. Shopify losing some of its edge there. We see the same thing with Peloton. They were all gung-ho during the pandemic, thinking that some of these trends would continue for consumers on the other side of it. And we're seeing that that's not the case. So Shopify probably going to have to get a bit more creative at this point to really stay afloat.
SEANA SMITH: Yeah, I think they will. And I think Wall Street's kind of searching for what the future will potentially look like for Shopify. We're seeing that reflected in their shares today. You talk about the fact that they might have to change their business here, going forward, to adapt to this, quote unquote, "new normal" after the surge that we did see an interest during the pandemic. So some of these pandemic winners are trying to figure out what business is going to look like post-pandemic. You can see it reflected. Shopify today, one year, the stock off 80%.
