Shopify’s quiet layoffs continue among customer service workers

Shopify, the popular online commerce platform, continues to make discreet layoffs within its customer service. While the exact scale of these reductions remains unclear, these measures are part of a broader reorganization and implementation of advanced technological tools, such as generative AI. This movement is part of a context of transformations and challenges facing many companies in the technology sector.

Recent transformations in customer service

Since 2022, Shopify has carried out several waves of quiet layoffs among its customer service employees. These reductions, although not publicly announced, were confirmed by sources close to the company. The decision to reduce internal staff while hiring external support staff through third-party providers, particularly in the Philippines and Canada, illustrates a strategy favoring cost reduction.

The rise of Artificial Intelligence

A key part of Shopify’s customer service revamp is the adoption of Artificial Intelligence. Since the beginning of 2023, the project called “Code Yellow” has aimed to increase the efficiency of support teams using generative AI. This innovation makes it possible to automate certain tasks previously carried out by humans, which helps reduce response times to merchants and improve their overall experience.

The impact on employees

Shopify’s layoffs have been felt hard by affected employees. Loss of access to company systems often occurred during or immediately after brief meetings with HR, making it difficult for employees to gauge how many colleagues were affected. Additionally, the layoffs come on top of a series of massive cuts to the company’s workforce.

Previous layoffs

Indeed, Shopify had already made significant layoffs, reducing its workforce by 10% in July 2022, followed by another 20% reduction in May 2023. These actions were motivated by mistakes in anticipating continued growth in e-commerce post-pandemic. The company’s CEO, Tobi Lütke, admitted to miscalculating this growth, which led to these layoff decisions.

Impact on customer service quality

The impact of these changes is not only felt at the employee level at Shopify, but also on customer service performance. The increased use of third-party vendors has been criticized by several current and former employees, noting a decline in the quality of responses provided by customer support. This raises questions about the sustainability of this strategy in the long term.

Following Shopify’s situation and its developments is essential to understanding the transformations within the e-commerce sector. These layoffs echo other descents into hell observed in big tech, and are a reminder that the use of AI and internal reorganization do not come without social costs. For more information on the challenges facing companies, visit Jobs Exchange.