Shopify Sells Off Logistics and Warehouse Automation Businesses

Canadian e-commerce company also announces layoffs

5/4/2023

Shopify, based in Ottawa, Ontario, announced major structural changes this week.

E-commerce player Shopify is re-scaling its operations amid stiff market headwinds. The Canadian company revealed in a blog post that it is cutting about 20% of its workforce and spinning off parts of its businesses.

“We are changing the shape of Shopify significantly today to pay unshared attention to our mission. There are a number of consequences to this,” wrote CEO Tobias Lütke. “I recognize the crushing impact this decision has on some of you, and did not make this decision lightly.”

Shopify is selling its Shopify Logistics group and Deliverr, Inc. shipping service arm to San Francisco-based freight forwarder Flexport. As part of the deal, Flexport will serve as Shopify’s official logistics partner. Shopify acquired Deliverr last year for $2.1 billion.

"For Flexport, this acquisition enables our vision for a full digital transformation of the global supply chain that we will bring to all customers. This democratization and pooling of scale will level the playing field for cost and speed of delivery for all businesses, not just the largest corporations in the world," said Flexport CEO Dave Clark.

In addition, Shopify is shedding its warehouse automation business 6 River Systems. That mobile robot fulfillment solutions provider is being acquired by the UK-based Ocado Group. "We are delighted to welcome new colleagues to the Ocado family. 6 River Systems brings exciting new IP and possibilities to the wider Ocado technology estate, as well as valuable commercial and R&D expertise in non-grocery retail segments,” remarked James Matthews, CEO of Ocado Technology.

The moves allow Shopify to focus on its core business, or, as Lütke put it, “main quests” versus “side quests.” Lütke also noted that the company is headed into years of even more change and high velocity that require focus, agility and innovation, including the strategic use of artificial intelligence.

“Shopify has the privilege of being amongst the companies with the best chances of using AI to help our customers. A copilot for entrepreneurship is now possible. Our main quest demands from us to build the best thing that is now possible, and that has just changed entirely,” he declared.