Shopify faces class action suit over severance pay

Shopify employees were once known for their loyalty and reverence for the company, but that was before people started getting fired. 

What happened: Shopify is facing a class action lawsuit that alleges the company dialled back on hefty severance sums offered to laid-off employees. Shopify says the offers were miscalculated, but ex-employees are asking for a $130 million apology, per the Canadian Press.   

  • It’s estimated that ~2,300 people were affected by Shopify’s cuts last month, or ~20% of the workforce. The company previously reduced its headcount by 10% last year,

The class action’s plaintiff says his severance offer was cut in half, from $88,000 to $44,000. He claims he was told he’d have to settle for $36,000 if he didn't accept it. He says other employees were offered between $10,000 and $60,000 less than they had initially accepted.  

  • I review severance packages every day and have 21 years of doing this and I have never seen any employer ever do anything like that,” one lawyer told the CP. 

Why it matters: It’s a sign of how times have changed in tech, and workers—once promised the moon in exchange for being a part of the next big thing—now find themselves in a much more adversarial relationship with their employers.

Zoom out: That said, the severance sums offered across the tech sector have been well above what the law guarantees. Ex-employees from Shopify, Microsoft, Meta, Amazon, and Salesforce were promised between 2-4 months, with more added for years of service.—SB