The move will eliminate about 1,000 jobs out of 10,000 or so total employees at Shopify. Most of the affected roles are in recruiting, support and sales, Lutke said in a memo posted on the company’s website.

Shopify tumbled as much as 16 percent to $30.66, the biggest intraday drop in almost three months. The Wall Street Journal reported the job cuts earlier Tuesday.

“We bet that the channel mix — the share of dollars that travel through e-commerce rather than physical retail — would permanently leap ahead by five or even 10 years” because of the pandemic, Lutke wrote.

“It’s now clear that bet didn’t pay off. What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point.”

Shopify was among the hottest pandemic stocks in 2020 and 2021 as online shopping boomed. It came crashing down this year, hampered by an economic cool-down and an easing of Covid-19 restrictions. Shopify shares have fallen 73 percent this year as of Monday’s close.

The Ottawa-based company reported a huge profit miss in the first quarter, and analysts have cut their expectations for the second quarter results, which are scheduled for Wednesday.

Analysts expect $1.33 billion in revenue for the period ended June 30, up just 11 percent from the first quarter.

For those losing jobs this week, Shopify will pay at least 16 weeks of severance and extend additional benefits, including an allowance to buy laptops and temporary coverage of home internet costs, a spokeswoman for the company said.

By Derek Decloet and Prarthana Prakash

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