On the morning of May 5th, Xiao Liu, who works at Shopify in Canada, woke up groggy and wanted to check the messages on the company’s Slack account. To her surprise, she found that her account had been forcibly logged out. When she checked her email, she discovered an email from HR saying, “today is your last day…”
On that day, the leading e-commerce SaaS company, Shopify, released its financial report for the first quarter of 2023, announcing a 20% reduction in workforce and the sale of their recently acquired logistics business, Deliverr, to freight services provider Flexport in exchange for a 13% stake.
In an open letter, Shopify’s founder and CEO, Tobias Lütke, stated, “The main mission is the company’s purpose and reason for existence. Side missions always distract people because the company has to divide its attention…”
“People often say that large companies are slow to act, not because of their size, but because they are distracted by all the side missions that have been added along the way. During periods of economic stability and prosperity, large companies can withstand the consequences of inefficiency. However, once they need to adapt to change, they cannot do so and will be replaced by many professional competitors or completely collapse.”
Since 2019, Shopify has enjoyed the growth brought by the global e-commerce boom while ambitiously building its logistics and fulfillment network in an attempt to seize the advantage in the e-commerce platform industry, currently dominated by Amazon. Now, Shopify has announced the termination of this “side mission” of logistics development, marking a disappointing exit from this battle.
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