The logo of Shopify is seen outside its headquarters in Ottawa on September 28, 2018. (REUTERS/Chris Wattie)
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Shopify no longer plans to use a large office space of over 250,000 square feet being constructed in downtown Toronto that was first planned to be a central hub for its employees, citing the pandemic and the growth of remote work as the main reason for decision.
The Ottawa-based tech company signed a 15-year lease that expires March 2037 for the property at The Well, a massive, high-profile retail, office, and residential complex with 1.2 million square feet of office space, on the west side of downtown Toronto at King Street West and Spadina Avenue.
The company had originally planned to occupy 254,000 square feet of office space there with an option to add another 433,752 square feet.
Now it appears the e-commerce giant may have moved too fast with its Toronto expansion given the evolution during three years of a pandemic that had multiple companies and industries move to remote work.
“We have a bold vision for the future of work at Shopify, and are no longer a workforce that centres around a physical workplace for day-to-day work,” Shopify spokesperson Alex Lyons told reporters.
Remote Workplace
Lyons said Shopify has shifted to a remote-first “digital by design” company and that the decision not to occupy the planned space at The Well was not part of cost-saving measures.
Shopify still has its primary office space at King Portland Centre, approximately 180,000 square feet spread over nine floors, “with plans to further develop and expand [that] into one central space to accommodate our needs,” said Lyons.
One of the owners of The Well, RioCan Real Estate Investment Trust, told reporters that Shopify is still “bound by the terms of their lease until 2037” even if the company does not move in.
On Dec. 12, Bloomberg News reported that Shopify stock has dropped 70 percent over the past year, which the media outlet said “has almost single-handedly dragged the Canadian stock market into the red this year.”
Bloomberg said the e-commerce software provider lost $161 billion in market value in 2022.
The news follows a Shopify announcement in July that the company would be laying off about 10 percent of its staff, an estimated 1,000 people, in what the company called a “reduction in workforce.”
At the time Shopify said almost all retail shifted online because of lockdown orders and the company overestimated the amount of e-commerce that would continue after the end of the COVID pandemic.
A request for comment from Shopify was not received by press time.