Shopify is calling it quits on its logistics business, selling it, and laying off some 20% of its workforce.
Shopify purchased Deliverr in May 2022 with the goal of challenging Amazon and Walmart in the e-commerce logistics business. Things have not gone according to plan, with the company now selling Deliverr to Flexport.
CEO Tobi Lutke said the deal found the perfect home for Shopify Logistics, including Deliverr:
Flexport, led by CEO Dave Clark and Founder Ryan Petersen, is the best builder and operator in the world of logistics. Contributing our work to Flexport, under the leadership of Harish Abbott, allows everything about Shopify Logistics to be more ambitious and global in nature. Making the global supply chains efficient and software addressable is Flexport’s main quest and so this is the perfect home for this part of Shopify.
The Wall Street Journal reports that Shopify is also selling its 6 River Systems warehouse robotics division to Ocado Group, an automated grocery-fulfillment company in the UK. The outlet also reported Shopify plans to lay off 20% of its staff following the sales.
In his blog post, Lutke says the company periodically must look at its main quest vs side quests and refocus on what’s important. That’s not to say that side quests can’t be important, but they must help further the company’s main quest to continue to make sense. It was this reevaluation that helped lead it to divest itself of its logistics business:
Shopify’s main quest is to make commerce simpler, easier, more democratized, more participatory, and more common. I think that we have built the best commerce platform in the world for that. Technological progress always arcs towards simplicity, and entrepreneurs succeed more when we simplify. But now we are at the dawn of the AI era and the new capabilities that are unlocked by that are unprecedented. 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.
