Commercetools, a leading "headless commerce" platform, has undergone a significant restructuring effort, laying off around 10% of its staff and making changes to its executive team. The move comes after the company failed to meet its aggressive revenue growth targets, citing macro-economic uncertainty and a shift in the e-commerce market.

In a memo to the company, CEO Andrew Burton attributed the restructuring to the company's inability to fully achieve its revenue growth targets over the last several quarters. The layoffs, which affected around 70 people, are part of a broader effort to "sharpen our focus and re-position commercetools to be in a stronger position to navigate and succeed in this turbulent market."

In addition to the layoffs, Commercetools is also making significant changes to its executive team. The company's chief revenue officer, Bruno Teuber, and chief financial officer, Dan Murphy, are both transitioning out of their roles. The CFO position will not be backfilled, with Finance, Digital Solutions, and Legal reporting to COO Matt Tuel. Denis Werner, the company's chief information security and compliance officer, is moving to a compliance-focused role under Dirk Hörig, the company's founder and chief innovation officer.

The restructuring effort will also impact several teams within the company, including marketing, sales, and internal operations such as HR and finance. Select staff in customer and product development will also be cut after reviewing performance and impact. Despite the layoffs, the company has 25-30 open roles it is looking to fill.

Commercetools' struggles come as the e-commerce market undergoes a significant shift. The company, which was founded in 2006 and raised $140 million at a $1.9 billion valuation in 2020, has seen its business boom as shopping went digital during the Covid-19 pandemic. However, the market has slowed in recent years, with U.S. retail e-commerce growing just 2.7% from the third to the fourth quarter of 2024, according to the U.S. Census Bureau.

The rise of competitors such as Shopify, which has grown to work with larger retailers, has also increased pressure on Commercetools. Additionally, the company faces uncertainty around tariffs and their impact on e-commerce companies and suppliers like Commercetools.

Despite the challenges, Burton remains optimistic about the company's future, citing its continued growth and the need for companies like Commercetools to adapt to changing market realities. "We had really ambitious goals that we had not reset to reflect the macro-economic uncertainty," Burton said. "Now, we're doing the same. In our Company All Hands tomorrow, we will walk through these changes in more detail — the why, what, and how we move forward together — staying true to our belief in adapting boldly to build what's next."

The restructuring effort is a significant setback for Commercetools, which had been seen as a strong player in the e-commerce market. However, the company's ability to adapt and pivot in response to changing market conditions will be key to its future success.