Shopify names new CFO, COO in shakeup of executive ranks

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Shopify Inc. named two new executives on Thursday, shaking up its top ranks after announcing cuts in its workforce in July.

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The Canadian company appointed Jeff Hoffmeister, who led Morgan Stanley’s technology investment banking group, as chief financial officer. The banker served as an adviser to Shopify for many years, including leading its IPO.

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“We are fortunate to benefit from (Hoffmeister’s) more than 20 years of investment banking experience in the technology sector and his keen vision of the future of the industry,” chief executive Tobi Lütke said in a press release.

Hoffmeister will take over from Amy Shapero, who will be stepping down from the company after its third quarter earnings announcement on Oct. 27.

“I look forward to leveraging my deep industry experience and working closely with Tobi and the rest of Shopify’s talented team to strengthen the company’s global leadership position and advance its mission of making commerce better for everyone,” Hoffmeister said.

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The e-commerce giant also promoted Kaz Nejatian to chief operating officer following outgoing COO Toby Shannan’s retirement. Nejatian will remain vice-president of product while undertaking the new role.

Shannan will serve as a special adviser through the end of the year and join the company’s board of directors next year. He’s been with the company since 2010.

ATB Capital Markets Inc. analyst Martin Toner said it’s unclear whether this shakeup will have a massive impact on the company as the key individuals who drive its strategy, such as Lütke, are still there and “not going anywhere for the foreseeable future.”

“The company was very, very different when Toby Shannon joined them and entrepreneurialism and startups were in the blood of a lot of these individuals,” Toner said.

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Analysts with National Bank of Canada maintained an “outperform” rating on the stock with an estimated target price of US$75 per share.

“Major management changes such as those noted above raise questions on a company’s progress in regard to strategy and execution,” analyst Richard Tse said in a note to clients.

Tse said there’s likely more changes to come as third quarter results approach. “The question is whether all the executive changes are complete,” he said.

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The leadership changes follow a disappointing second-quarter loss and mass layoffs that affected 1,000 workers.

Executives had warned that it would report more losses for the remainder of the year in part due to costs related to the integration of fulfillment provider Deliverr, which it acquired for US$2.1 billion in July.

They said the third-quarter adjusted operating loss is expected to increase over the second quarter as changes to its compensation network are implemented and Deliverr operations begin.

Shopify shares rose 1.53 per cent to US$31.48 in New York Thursday afternoon.

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