• Shopify’s CEO Tobi Lütke mandates that employees must justify why a role can’t be automated before hiring, signaling AI adoption as essential for productivity and efficiency. AI proficiency will now factor into performance reviews.
• Companies like Shopify, Google and Meta are cutting jobs while heavily investing in AI tools (e.g., Shopify Magic, GitHub Copilot) to handle tasks from customer service to coding, redefining traditional roles.
• While AI displaces some jobs, it also creates opportunities for higher-value work. Critics warn of disproportionate impacts on junior or repetitive roles, citing challenges in rapid upskilling.
• Shopify’s workforce shrank from 8,300 in 2023 to 8,100 by late 2024, reflecting a broader trend of tech layoffs (152,000+ in 2024) as companies prioritize AI-driven efficiency over traditional hiring.
• Industries like legal, marketing and finance are adopting AI for tasks like contract review and data analysis. Experts predict a future where human-AI collaboration dominates, requiring new policies for reskilling and worker protections.

Shopify CEO Tobi Lütke is making one thing clear to employees: artificial intelligence isn’t just a tool—it’s a fundamental requirement. In a memo sent to staff last month, the e-commerce executive announced that teams must now justify why a job can’t be automated before requesting additional hires, signaling a seismic shift in corporate hiring strategies amid the AI revolution.

The directive underscores a broader trend in the tech industry, where businesses are aggressively investing in AI while simultaneously trimming headcounts. For Lütke, the mandate is about optimizing efficiency. “What would this area look like if autonomous AI agents were already part of the team?” he wrote in the memo, later shared publicly on X. “This question can lead to really fun discussions and projects.”

Automation’s evolving role in work

The tension between human labor and automation isn’t new. From the Industrial Revolution to the rise of computing, technological advances have continually displaced certain jobs while creating others. However, AI’s rapid evolution—particularly generative tools like ChatGPT and coding assistants—has accelerated this disruption in white-collar sectors once considered immune.

Shopify’s policy mirrors moves by other tech giants. In 2023–2024, companies like Google and Meta slashed thousands of roles while funneling billions into AI development. Meanwhile, tools like Shopify Magic (the company’s AI suite for merchants) and GitHub’s Copilot have demonstrated AI’s capacity to handle tasks from customer service to software engineering.

“This isn’t about replacing humans but redefining productivity,” says Dr. Linda Li, a labor economist at Stanford University. “Employers now see AI as a baseline, not an experiment.”

A “fundamental expectation” of AI fluency

Lütke framed AI adoption as nonnegotiable, stating that “using AI well is a skill that needs to be carefully learned by… using it a lot.” The company will now factor AI proficiency into performance reviews, embedding it into its culture.

Employees who embrace AI have delivered “100X the work” on projects previously deemed unfeasible, Lütke noted. One example: Shopify’s Sidekick chatbot, which assists merchants with store management, reducing the need for human support staff.

But the policy raises questions about workforce equity. Critics argue that sidelining roles AI can perform might disproportionately impact junior employees or those in repetitive positions. “Not everyone has the resources to upskill overnight,” cautioned Sarah Roberts, a tech labor advocate.

The numbers behind the strategy

Shopify’s headcount has declined steadily since 2022, when it cut 14% of its workforce. By December 2024, its employee base shrank to 8,100 from 8,300 a year earlier. CFO Jeff Hoffmeister recently told investors the company aims to keep headcount “relatively flat,” though compensation costs could rise as it hires specialized AI talent.

Globally, tech layoffs exceeded 152,000 in 2024, per Layoffs.fyi, even as AI investment soared. Analysts say Shopify’s approach reflects a pragmatic pivot: automate routine tasks, then redirect human creativity to higher-value work.

Broader implications for the labor market

Shopify’s policy could foreshadow wider adoption of AI-centric hiring standards. Industries like legal services, marketing and finance are already deploying AI for contract review, ad targeting and data analysis.

“The H-1B visa debate is almost quaint now,” remarked tech analyst Mark Wilson, referencing disputes over immigrant labor. “The real competition isn’t between humans across borders—it’s between humans and algorithms.”

Yet some see opportunity. “AI won’t replace you, but a person using AI might,” Lütke’s memo suggested, urging employees to leverage tools to “multiply” their output.

Looking ahead: A new social contract?

As AI reshapes work, policymakers and companies face pressure to address reskilling and safety nets. The EU’s AI Act and proposed U.S. federal guidelines aim to balance innovation with worker protections, but legislation lags behind technological leaps.

For Shopify, the path is clear: AI isn’t optional. “Our collective skill and ambition, multiplied by AI, is what will serve our merchants,” Lütke wrote.

Shopify’s AI mandate marks a tipping point in corporate strategy—one that prioritizes human-AI collaboration but leaves little room for roles that fail to evolve. As businesses worldwide grapple with AI’s potential, the question isn’t just which jobs will disappear, but how societies will adapt to a workforce where proving your irreplaceability starts with outthinking a machine.

Sources include:

CNBC.com

Discussion.fool.com

TheVerge.com