Shopify on Wednesday announced a plan to revamp the company’s management structure, driving a flatter organizational structure and reducing the number of middle managers. Under the plan, Shopify will divide its employees into two categories: individual contributors and managers.
Beginning in mid-March, Shopify employees will have the option to become full-time managers or specialists. Managers will focus on things like resource planning and strategy, while specialists will focus on developing products.
Shopify says it made this adjustment because the company typically rewards people who take on a lot of management responsibility more with higher salaries and more opportunities for career advancement. However, not all employees expect to manage others. The purpose of this adjustment is to better reward employees who continue their careers without becoming managers. In the future at Shopify, the availability of managerial positions will no longer have an impact on compensation.
Most employees want their primary job to be developed, which is the number one reason they join Shopify,” said Tia Silas, chief human resources officer at Shopify, in an email. That’s why we’ve introduced the concept of job scope and skill level so that specialists can spend most of their time on product development, continue to level up their expertise and earn higher salaries.”
She also said Shopify expects to see a reduction in the number of managers overall, leading to a “flattening” of the organization. “With the new system, we’re clearing the way for experts to advance their careers so they can focus on what they do best: building world-class products.”
Shopify isn’t the only tech company rethinking its management function. As previously reported, Meta has asked many middle managers to take on new roles as individual contributors, improving overall efficiency as the company makes cuts.
Similar to Meta, Shopify is putting a higher priority back on improving efficiency in a tough economic environment. In addition to driving a flatter organizational structure, Shopify has made a number of other adjustments over the past few months.
In January, Shopify launched an initiative internally dubbed “Chaos Monkey 2023. When employees returned from vacation, they found that all meetings with more than two people had been canceled. Shopify also canceled its all-staff meetings, which had been held on Wednesdays, and limited large team events to a specific time slot on Thursdays.
Shopify said at the time that these adjustments would reduce the number of meeting hours by 320,000 for the year. After a two-week hiatus, employees will have the option to add meetings back into their schedules. But before rescheduling meetings, they were asked to think about the actual value of those meetings.
As part of Operation Chaos Monkey, Shopify also removed all employees from each of the company’s public channels on Slack, deleted the message history of those channels, and limited each channel to a maximum of 150 members. At Shopify, Slack will be transformed into a one-on-one chat-only platform, with all other office messaging moving to Meta’s Workplace.
Internal documents about the “chaos monkey” show that “these adjustments will help focus our time and attention, drive faster shipments, and optimize our operational capabilities.”
In 2022, Shopify also overhauled its compensation structure to provide greater flexibility in the cash and stock components of employee compensation packages. The new compensation system, called Flex Comp, comes after Shopify faced employee lawsuits over equity pay as its stock price plummeted.
Last October, Sellars also announced in an email that the employee appraisal process would also be adjusted. A company spokesperson said at the time, “Like Flex Comp, we are exploring reinventing the space to deliver a performance management product based on better data entry, simplicity and clarity. This is in line with our values as a product-first company.”
These new adjustments come with changes in Shopify’s management. in April 2022, Sellars joined Shopify from Wells Fargo. in January, Kaz Nejatian was promoted to chief operating officer, replacing Toby Shannan, who was previously the longtime chief operating officer. Shopify also appointed a new Jeff Hoffmeister, Chief Financial Officer. And Chief Technology Officer Allen Leinwand left in January after more than a year in the role.
