Ottawa-based Shopify Inc. says it has terminated a 'very small, single-digit number of salespeople' over misleading sales figures.Sean Kilpatrick/The Canadian Press
Shopify Inc. SHOP-T says it fired multiple employees who had inflated sales figures, a matter that coincided with several high-level departures, but which the company says had no effect on financial results.
The e-commerce company said in a statement that last summer, a “very small, single-digit number of salespeople misrepresented the scope of products they had sold.”
“We immediately investigated, fired them, and strengthened our systems. This had no impact on our financials and the issue is closed,” Shopify spokesperson Ben McConaghy said in a statement.
The Logic reported on the sales fraud Monday, saying it lasted more than a year and sparked an internal investigation.
The fraud took hold amid new, aggressive sales targets for Shopify’s employees and an internal commission-tracking system that allowed employees to inflate expected account revenue without proper accountability, The Logic reported.
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Shopify did not respond to a question about whether the fraud stemmed from aggressive sales expectations.
After enduring a share price slide in 2022, the company’s stock has steadily risen, and in recent months has exceeded its 2021 highs. Shopify shares closed 5.2 per cent higher on the Toronto Stock Exchange Monday, and are up 43.2 per cent since the beginning of the year.
Since 2023, the company has ramped up its enterprise-level offerings – services for bigger companies that require more sophisticated support. Expanding its features in that category has been part of Shopify’s strategy to regain the momentum that made it Canada’s most valuable company early in the COVID-19 pandemic, a title it briefly held again this fall.
The company has been on an earning streak in recent months, posting double-digit revenue and gross merchandise volume growth. In November, Shopify reported third-quarter revenue, income and profit and projected fourth-quarter earnings that exceeded analyst expectations for the busy holiday season.
Shopify has seen some high-level departures in the past few months. This included chief operating officer Kaz Nejatian’s exit in mid-September. The company appointed general counsel Jess Hertz to fill the COO role.
In early October, chief revenue officer Bobby Morrison announced his departure on LinkedIn. According to The Logic, Mr. Morrison was responsible for expanding the company’s sales operation and for changes to its commission structure. He did not respond to The Globe and Mail’s questions about the inflated sales figures.