Canadian e-commerce company Shopify (SHOP) saw its share price increase 23% as it announced strong earnings and that it is cutting 20% of its workforce.
Shopify’s stock finished trading on May 4 at $77.65 per share after it reported revenue of $1.51 billion U.S., which was up 25% from a year earlier and better than the $1.43 billion U.S. that Wall Street had expected, according to Refinitiv data.
The Ottawa-based company also announced earnings of $68 million U.S., or $0.05 U.S. per share. Analysts who cover the company were expecting a quarterly loss of -$0.04 a share.
A year earlier, Shopify reported a net loss of -$1.5 billion U.S., or -$1.17 U.S. per share.
At the same time, the company said it is cutting 20% of its staff. Shopify had 11,600 employees and contractors at the end of 2022.
The new layoffs mark the second round of job cuts at the company. Last summer, Shopify cut 10% of its workforce.
The company also announced that it’s selling its logistics unit to Flexport, a sale that includes Deliverr, the last-mile delivery company it acquired for $2.1 billion U.S. in May 2022.
Shopify is also selling 6 River Systems, the warehouse robot maker it acquired in 2019 for $450 million U.S. to British tech company Ocado Group (OCDO).
Terms of both sales were not disclosed.
Shopify said it is making the cuts and sales to better focus on its core business of creating tools for companies to sell products online.
The stock of Shopify has now risen 47% over the past 12 months.
However, the stock remains 67% below a peak reached in November 2021 when the Covid-19 pandemic led to a boom in online shopping and e-commerce transactions.
