Shopify cuts jobs, food inflation falls and Rogers’ cheaper 5G plan: Business and investing news for May 7

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Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.

Shopify lays off 20% of workers, sends stock soaring

What was once Canada’s most valuable tech company continues to face hard times, cutting nearly 20 per cent of its global work force this week, Temur Durrani reports. The Ottawa-based company has sold off its delivery and warehousing operations after spending billions of dollars building up its freight and logistics capabilities in a broader push to compete against Amazon. All those expansions are now being sold to Silicon Valley-based Flexport Inc. for an equity interest. Shopify emphasized earlier this year that it would not be making any cuts beyond its 10-per-cent layoffs last July. Chief executive officer Tobias Lutke at the time apologized for the cuts because he miscalculated how far e-commerce would grow based on trends from earlier in the pandemic. This week, however, ahead of its first quarterly earnings report for 2023, Shopify told staffers about the new job cuts in a memo from Mr. Lutke. Investors applauded Shopify’s moves Thursday, sending the stock soaring more than 23 per cent as it also reported results.

Rogers launches cheaper 5G phone plan

Rogers is introducing a lower-cost 5G cellphone plan and doubling the amount of data that comes with its most popular wireless offering as it looks to boost uptake of its fifth-generation wireless services. As Alexandra Posadzki reports, the move is also driven by the chance to sell wireless and internet bundles to the company’s newly acquired customers in Western Canada after recently closing its $20-billion takeover of Shaw. Rogers’ $85 plan, which gives customers 25 gigabytes of data before throttling their speeds, will now come with 50 gigabytes at full speed. There is a $20 discount if the plan is bundled with residential services. The telecom is also introducing a $65 plan that comes with 25 gigabytes of data and is available for $55 if bundled with home services.

Food inflation is finally falling

The worst of food inflation may finally be behind us. According to Matt Lundy, the prices charged by farmers and food processors have slowed in recent months. This may partly be due to farmers enjoying a better growing season in 2022, with higher yields of key crops, while energy costs have tailed off. Last month, the Bank of Canada said cost pressures were softening across the food-supply chain. Grocery prices rose at an annual rate of 9.7 per cent in March, down from recent increases of more than 11 per cent.

Price increases for groceries and farm products

Year-over-year percentage change

Farm prices

Groceries

12%

35%

30

10

25

8

20

6

15

4

10

2

5

0

0

-5

-2

2018

2019

2020

2021

2022

2023

Note: Farm prices are brought forward by six months to remove

lag in retail pricing.

the globe and mail, Source: statscan

Price increases for groceries and farm products

Year-over-year percentage change

Farm prices

Groceries

12%

35%

30

10

25

8

20

6

15

4

10

2

5

0

0

-5

-2

2018

2019

2020

2021

2022

2023

Note: Farm prices are brought forward by six months to remove

lag in retail pricing.

the globe and mail, Source: statscan

Price increases for groceries and farm products

Year-over-year percentage change

Groceries

Farm prices

12%

35%

30

10

25

8

20

6

15

4

10

2

5

0

0

-5

-2

2018

2019

2020

2021

2022

2023

Note: Farm prices are brought forward by six months to remove lag in retail pricing.

the globe and mail, Source: statscan

Canadian wealth managers notify clients of data breach

Several of Canada’s major wealth managers, including mutual fund providers Mackenzie Investments and Franklin Templeton Canada, are notifying fund investors that their personal information has been breached in a data hack. The cyberattack happened in January, and leaked data includes investors’ names, addresses, social insurance numbers, account numbers and, in some cases, dealer account numbers, writes Irene Galea, Clare O’Hara and Andrew Willis. The breach is linked to back-office service provider InvestorCOM Inc., which provides printing and delivery of client materials, and the use of popular data transfer tool GoAnywhere. Companies and organizations around the world have been affected, including The Procter & Gamble Company, multinational power company Hitachi Energy and the City of Toronto. Neither Mackenzie Investments or Franklin Templeton shared how many clients have been affected.

Many young Canadians are giving up on home ownership

Despite housing prices falling due to a rise in mortgage rates, home ownership still feels out of reach for many young Canadians. Rob Carrick ran a survey asking Gen Z and millennials how they felt about home affordability. Of the 1,545 people between the ages of 20 and 40 who replied, 52 per cent described themselves as either furious or angry about it. Perhaps that’s because for decades, we’ve built home ownership into the pinnacle experience of Canadian adulthood, yet many can’t seem to get through the door. Almost 44 per cent of survey participants indicated they’ve completely given up on home ownership or feel it likely won’t happen. Just 19 per cent said they’re convinced they’ll own a home at some point. Parental financial help has in the past been a big factor in getting young people into a first home, but more than half of survey participants said they are not counting on family to get into the housing market.

The difference between Aeroplan and WestJet Rewards

When it comes to air travel in Canada, most travellers prefer either Air Canada or WestJet. But if you asked them about the carriers’ two respective loyalty programs – Aeroplan and WestJet Rewards – they might not be able to tell you the exact differences. That’s about to change with one of the programs. As of May 15, Aeroplan members will be able to send and receive text messages free on all WiFi-equipped Air Canada planes. While this may not immediately shift frequent flyer loyalties, it does give Aeroplan members another perk. Barry Choi takes a closer look at how the two programs compare.

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Now that you’re all caught up, prepare for the week ahead with The Globe’s investing calendar.