A rough year for tech

Shopify has had a stunningly bad year, but then again, so have most tech companies. 

Driving the news: This year, Shopify saw its pandemic-era stock gains erased by the spring, laid off about 10% of its workforce in the summer, restructured its leadership team by the fall, and just this week, ditched plans to move into an impressive Toronto office tower. 

Shopify made a big bet… 

… on en-commerce. Anyone selling anything flocked to Shopify after lockdowns took down physical stores for the better part of 2021, and the company hired 2,000+ people to meet the demand. The problem? Shopify didn't quite account for the return of in-person shopping.  

Zoom out: Rising inflation and interest rates have spelled trouble for all companies that enjoyed aggressive (now unsustainable) growth in recent years. Collectively, over 120,000 tech employees have been laid off this year, and many companies have frozen hiring.   

Why it matters: Shopify’s struggles mostly shine a light on the company’s outsized footprint in the Canadian tech ecosystem. The stock—down ~70% on the year—single-handedly dragged the TSX down four percentage points. Without it, the index would be down 2%.

  • Canada is earning a reputation as a tech hub, but hasn’t cracked the code to scaling startups to the size of Amazon, Meta or Google. 

The company may have miscalculated on a big bet, but it’s still the second-largest online retailer in North America and continues to roll out new services, including point-of-sale hardware, business loan services, and an order fulfilment network to rival Amazon.