Shopify last week announced that it would be the latest big tech firm to undergo mass layoffs. The company is cutting 20% of its 11,600-person staff. The news arrived during earnings that beat Wall Street expectations, shooting its stock price up as a result.
Also included in the announcement was news that the Canadian e-commerce giant had found a new owner for 6 River Systems, the warehouse automation firm it purchased in 2019 for nearly half-a-billion. It was about as good of timing as anyone could ask for. The category has been ascendent for the past decade, but things really began to accelerate during the pandemic — and 6 River had a healthy five-year head start.
But Shopify ultimately decided to cut 6 River loose among broader losses. Shopify CEO Tobias Lütke failed to address the sale directly in his open letter addressing the layoffs. He did, however, address the related sale of Shopify Logistics to Flexport, noting:
Shopify’s main quest is to make commerce simpler, easier, more democratized, more participatory, and more common. I think that we have built the best commerce platform in the world for that. Technological progress always arcs towards simplicity, and entrepreneurs succeed more when we simplify. But now we are at the dawn of the AI era and the new capabilities that are unlocked by that are unprecedented. Shopify has the privilege of being amongst the companies with the best chances of using AI to help our customers. A copilot for entrepreneurship is now possible. Our main quest demands from us to build the best thing that is now possible, and that has just changed entirely.
Obviously the 6 River acquisition was part of building up the logistics side of the business by providing automated 3PL to sellers. Ocado Group, an English grocery technology licenser, will become the robotics firm’s new parent.
“We are delighted to welcome new colleagues to the Ocado family. 6 River Systems brings exciting new IP and possibilities to the wider Ocado technology estate, as well as valuable commercial and R&D expertise in non-grocery retail segments,” Ocado CEO James Matthews said in a release. “Chuck robots are currently deployed in over 100 warehouses worldwide, with more than 70 customers. We’re looking forward to supporting 6 River Systems to build on these and new relationships in the years to come.”
Questions remain surrounding the deal. As 6 River co-founder/Shopify Logistics VP Jerome Dubois recently told me in an interview, the robotics firm struck a deal with Shopify that allowed it to continue supplying systems to customers. That list, which included Ocado, was a far cry from Amazon’s Kiva deal, which suddenly left customers without access to robotic systems.
Dubois says it had the conversation “up front,” adding, “We had a strong positive trajectory; we had strong investors. Everyone was really bullish on it. That’s not what it’s been. It’s been the opposite. We’ve been run independently from Shopify. We continue to invest and grow the business.”
That conversation occurred at the tail end of March. Economic headwinds have a way of shifting these things quickly.
Shopify sells 6 River Systems to new owner by Brian Heater originally published on TechCrunch
Originally published at techcrunch.com