The company announced Thursday in a blog post it will also cut about 20% of its workforce, the second mass layoff its had in less than a year. Last year, Shopify trimmed 10% of its workforce and reportedly laid off dozens of other employees before and after that announcement. The company said those affected will receive 16 weeks of severance pay and medical benefits.
"There's no way to make this good news, but we designed a package that will attempt to make it the best possible version of a bad day," Shopify CEO Tobias Lütke said in the blog post.
The business changes are also a remarkable reversal after the Canadian company's multiyear effort to build its own warehousing and delivery services. But investors welcomed the company's move to focus more on its retail business by sending its stocks as high as 17% in premarket trading.
Shopify also said in its earnings report that it pulled in $1.5 billion in revenue for the first quarter, which outperformed Wall Street's expectations. It reported a profit when analysts had been expecting a loss.
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