Shopify lets go of its logistics dreams

Like our goal of reading 100 books, Shopify started the year with an unattainable dream that it’s now abandoned.

What happened: Shopify is laying off 20% of its global workforce after selling its logistics operations (including e-commerce platform Deliverr) to American freighter Flexport and its warehouse robotics operations to British grocery fulfillment company Ocado Group.

  • The company has been scrambling to cut costs since e-commerce growth slowed to a crawl last year and already laid off 10% of its global workforce last July.  

Why it matters: This, per The Wall Street Journal, ends Shopify’s quest to build a logistics and fulfillment service. CEO Tobias Lütke hesitated to position the effort as a challenger to Amazon but did once say Shopify was “trying to arm the rebels” against the tech behemoth. 

  • Just a year ago, Shopify splashed $2.1 billion to buy up Deliverr to fulfill those dreams and as recently as February, it was adding new logistics features.

Zoom out: Lütke said the logistics biz was ultimately a “side quest” for which Shopify no longer has time. He’s not alone. From Chinese gaming giants to German sportswear brands, companies can’t afford to focus on anything that isn’t their core business these days.—QH