The logo of Shopify hangs behind the Canadian flag after the company's IPO at the New York Stock Exchange on May 21, 2015.Lucas Jackson/Reuters
Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Don’t panic, but a recession may ‘technically’” be coming
The U.S. economy unexpectedly shrank for the second quarter in a row, triggering signs of a technical recession, if not a full-blown one. As Jason Kirby writes, gross domestic product (GDP) fell at a 0.9-per-cent annualized rate, bringing the total contraction of the U.S. economy in the first half of 2022 to 1.3 per cent. While two consecutive quarters of shrinking economic output is often regarded as an informal sign of a recession, it’s not an official definition, and many economists suggest recession talk is premature because of record-low unemployment levels.
Shopify cuts, losses and mea culpa
Ottawa-based tech giant Shopify made headlines again this week after cutting 10 per cent of its staff, about 1,000 people globally, Temur Durrani writes. Most of the jobs affected were in sales, accounting and recruiting, and this new round of layoffs follows 50 jobs getting cut in early July. Chief executive officer Tobias Lutke apologized for overestimating the growth of e-commerce, which led Shopify to hire too many people in order to meet that expected demand, writing “I got this wrong,” in a memo to 10,000 employees. A day later, Shopify posted a massive second-quarter net loss of US$1.2-billion, and warned of more operating losses ahead as it confronts a slowdown in e-commerce. Earlier this month, Shopify announced it was delaying compensation overhauls for employees disgruntled with falling stock prices, and cancelling internships and job offers for people who were to begin work in the fall.
Retail rewind: the e-commerce boom is fizzling out
Turns out, we love going to the mall after all. As pandemic restrictions have lifted, many people are returning to old habits – trying on clothes, testing mattresses, browsing shelves – and as the Shopify layoffs seem to show, ditching online shopping. As Matt Lundy writes, Canadians spent about $3.5-billion on e-commerce orders in May, down 23 per cent (or around $1-billion) from a year earlier, when parts of the country were still in lockdown. It’s a similar story in the U.S., but don’t call it a bust yet.
Should you stay (at your job) or should you go (for more money)? It depends who you ask
For more than a year, Canada’s record labour shortage has meant big pay bumps for those willing to switch jobs. But with a possible recession on the horizon and some tech companies trimming their headcounts, some workers are starting to wonder whether jumping ship to get more money is a good idea. As Erica Alini reports, the latest Statistics Canada data shows employers were actively seeking to fill over a million vacant positions at the beginning of May, up 42.5 per cent from the same month last year. So while there are signs of a cooldown, employees who haven’t seen a pay raise in years and whose wages have fallen far below inflation and market rates are still likely to significantly boost their compensation by changing jobs right now.
The culprit of the Rogers outage: a coding error
Weeks after a widespread Rogers outage that interrupted wireless, cable and internet services across the country, the telecommunications company has finally determined the cause. In documents disclosed publicly by the Canadian Radio-television and Telecommunications Commission, Rogers said that a coding error was introduced during an upgrade to the core infrastructure that supports the company’s wireless and broadband networks. As Alexandra Posadzki reports, the error triggered a cascade of events that even the company’s technicians had difficulty pinpointing, and took all day for the team to restore the network.
Stressed about your massive mortgage? Here’s what to do
We’re now in a period of mental adjustments on home ownership, starting with the idea that a big mortgage is a noble burden because you own an asset that rapidly gains value. Combined with higher living costs and rising debt payments, young homeowners are saddled with the most money stress today – and falling home prices means there’s no moral victory for all this pain. So what should homeowners under pressure from rising mortgage costs do? Rob Carrick advises thinking in increments of $100 in terms of the financial steps you take to save money. “We’re way beyond lattes here,” he writes. Storm clouds are brewing over Canada’s real estate market – and things are likely to get worse for borrowers.
Now that you’re all caught up, prepare for the week ahead with the Globe’s investing calendar.
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