Canadian e-commerce Shopify promotes the reform of flat organizational structure to reduce the number of middle managers

Shopify announced a plan on Wednesday to reform the company’s management,promote the flattening of the organizational structure and reduce the number of middle managers.According to this plan,Shopify will divide employees into two categories:individual contributors and managers.

From the middle of March,Shopify employees will have the option to become a full-time manager or expert.Managers will focus on resource planning and strategy,while experts will focus on product development.

Shopify said that the reason for this adjustment is that the company will usually reward those who bear a lot of management responsibilities more,so that they can get higher wages and more career development opportunities.However,not all employees expect to manage others.The purpose of this adjustment is to better reward those employees who continue their career development without becoming managers.In the future,whether to take the position of manager in Shopify will no longer affect the salary.

Tia Silas,chief human resources officer of Shopify,said in an email:”Most employees want their main job to be development,which is the primary reason for them to join Shopify.Therefore,we have introduced the concept of work scope and skill level,so that experts can spend most of their time on product development,continuously improve the level of professional skills,and obtain higher salaries.”

She also said that Shopify expected that the number of managers would decline in general,which would lead to the”flattening”of the organizational structure.”Through the new system,we will clear the obstacles for the professional development of experts,so that they can focus on what they are best at:building world-class products.”

Shopify is not the only technology company that is rethinking its management function.It was previously reported that Meta required many middle-level managers to take on new roles as individual contributors to improve overall efficiency in the case of layoffs.

Similar to Meta,in the tough economic environment,Shopify is putting efficiency back on a higher priority.In addition to promoting the flattening of the organizational structure,Shopify has also made a series of other adjustments in the past few months.

In January this year,Shopify launched an initiative called”Chaotic Monkey 2023″internally.When the employees came back from the holiday,they found that all meetings with more than two people were canceled.Shopify also canceled the staff meeting originally held on Wednesday and limited the large-scale team activities to specific time periods on Thursday.

Shopify said at that time that these adjustments would reduce the meeting time of 320000 hours this year.After two weeks of suspension,employees can choose to add the meeting back to the schedule.But before rescheduling meetings,they were asked to reflect on the actual value of these meetings.

As part of the action,Shopify also removed all employees from each public channel of the company’s Slack,deleted the message history of these channels,and limited the number of members of each channel to 150 at most.In Shopify,Slack will be transformed into a platform for one-on-one chat only,and all other office messages will be transferred to Meta’s Workplace.

The internal document on”Chaos Monkey”shows that”these adjustments will help to focus our time and attention,promote faster delivery,and optimize our operational capabilities.”

In 2022,Shopify also carried out a comprehensive reform of the compensation structure,providing greater flexibility in the cash and stock composition of the employee compensation plan.This new compensation system is called Flex Comp.Before that,Shopify was faced with an employee’s lawsuit against equity compensation due to the collapse of its share price.

Last October,Silas also announced in an email that the staff assessment process will also be adjusted.At that time,the company’s spokesman said:”Like Flex Comp,we are exploring to reshape this field and provide performance management products based on better data input,simplicity and clarity.This is in line with our values as a product first company.”

These new adjustments are accompanied by changes in Shopify’s management.In April 2022,Silas joined Shopify from Wells Fargo.In January this year,Kaz Nejatian was promoted to Chief Operating Officer,replacing Toby Shannan,who had served as Chief Operating Officer for a long time.Shopify also appointed a new CFO,Jeff Hoffmeister.Allen Leinwand,the chief technology officer,resigned in January this year after serving for more than one year.