Dive Brief:
- Shopify named Morgan Stanley investment banker Jeff Hoffmeister as its new CFO, effective Oct. 27. Hoffmeister will succeed Amy Shapero who will step down following the company’s third quarter earnings announcement, the company said in a release Thursday.
- The move comes shortly after the company announced in July that it was slashing its workforce by 10% after the e-commerce giant missed earnings and revenue expectations for the second quarter.
- As part of the leadership shakeup, Kaz Nejatian will succeed Toby Shannon as chief operating officer (COO), effective immediately. Shannon is pivoting to become a special advisor and board member.
Dive Insight:
Hoffmeister has over two decades of experience at Morgan Stanley where he worked in the technology investment banking group. The veteran investment banker is experienced in mergers and acquisitions (M&A), initial public offerings (IPOs) and a range of equity and debt financing, according to his Linkedin profile. Prior to joining Morgan Stanley, Hoffmeister was an audit manager at PwC.
In July, the Canadian e-commerce giant reported a loss of three cents per share in Q2 earnings which missed the Zacks Consensus Estimate by 200%. The company also reported total revenue of $1.3 billion which was 2.98% behind the estimate as well.
In response to disappointing earnings, the company announced on July 27 that “the next part of their journey would involve fewer workers,” that is — 10% fewer.
The COVID-19 pandemic caused essentially all of retail to shift online due to shelter-in-place restrictions from state to state. As a result, demand for Shopify reached new highs and the company expanded.
In a statement to those being laid off from Shopify, CEO Tobias Lütke said that the company placed a bet on the share of dollars traveling through e-commerce rather than physical retail jumping ahead five or 10 years. “The bet didn’t pay off,” Lütke wrote, “what we see now is the (channel) mix reverting to roughly where pre-Covid data would have suggested it should be at this point,” he said.
Lütke credited Shapero for her “financial expertise, steady hand, and deep connection to the company's mission,” as they scaled their finance function during the period of growth caused by the pandemic. He also expressed confidence in the company’s new finance chief.
“As we position Shopify for the future, the addition of Jeff to our leadership team will continue to strengthen our ability to deliver value for our merchants, partners and investors,” said Lütke in the company statement regarding the appointment of Hoffmeister to the top finance seat.
