Shopify employee blows whistle on cost-cutting, AI-driven shift

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A Shopify employee broke their non-disclosure agreement (NDA) to reveal company actions on cost-cutting and AI-driven models on Twitter.

The employee alleges that Shopify promised job security to staff in early 2022 but laid off many in July that year. The layoffs were not due to a CEO’s decision but to replace full-time employees with cheaper contract labor and increase reliance on AI support. The tweets also mentioned how Shopify uses AI for tasks like generating product descriptions, creating virtual sidekicks, and developing a new help center AI agent in beta testing.

The consequences of this cost-cutting strategy have negatively impacted customer satisfaction. The reduction in staff and the rise of outsourced, cheap contract labor have led to significant delays in customer support, leaving frustrated merchants waiting for hours or even struggling to receive clear answers. Additionally, teams responsible for monitoring fraudulent stores have been overwhelmed, leading to a potential increase in the number of scam businesses on the platform.

The employee’s Twitter thread also raised concerns about the well-being of Shopify’s workforce. Since the layoffs, remaining staff members have reportedly faced increased workloads without proportional compensation or benefits, leading to burnout, anxiety, and stress leave. Despite these issues being brought to leadership’s attention, they were dismissed as “system” problems, and the company’s focus on AI-based solutions appeared to supersede the value once placed on human-driven customer service.

The sources for this piece include an article in TheDeepdive.

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