Over the past two months, there have been several layoffs in the tech sector, and while many of the current layoffs are coming from U.S. companies, some say the tech sector in Canada will be hit hard. With potential layoffs and hiring freezes looming, the tech industry needs to know the potential impact on their organizations and talent.
We spoke with Jeremy Shaki, CEO and Founder of tech education leader Lighthouse Labs, who shared his insights on the impact of the ongoing tech layoffs and hiring freeze on the Canadian tech industry and his thoughts on how the dismissals will impact talent.
Q: There has been a lot of news lately about tech layoffs and hiring freezes. How do you think this will impact Canada’s tech sector?
JS: Judging from the speed in which those laid off have been finding new roles, it seems as though tech might be going through a bit of an adjustment from the crazy year that was 2021. However, tech continues to grow, and other fast-hiring companies are scooping up recently laid-off talent.
The biggest concern about the layoffs would be the psyche of the Canadian public. Tech has been Canada’s darling for a while and may feel slightly less safe than it did previously. I don’t believe that to be true, but a change in attitude towards tech might be self-perpetuating.
The more significant impact on tech isn’t the layoffs but what’s causing them. This is the first time that we have seen large-growth companies in tech turn their attention to profitability in the way that they have been doing as of late. If this focus on profitability is a real trend, it will have a massive impact on those companies that just raised a large amount of funding in the past 12-18 months.
Q: What can Canadian tech workers do to protect themselves from the ongoing tech layoffs?
JS: They should not be complacent about their skills or entitled about their career level. The reality is that companies jumped to overpay many people in the past year and a half during a hiring frenzy, and now they may need to re-adjust. As a result, some people will likely feel entitled to their new normal and feel they do not need to reinforce their fundamental skills.
This is a time for workers to make sure that they remain adaptable as tech companies consider how they adjust to some of their new normals. This might mean picking up new skills that weren’t needed when an employee started at the company.
Q: What can Canadian tech employers do to ensure talent doesn’t look across the border for job opportunities?
JS: Employers can start by helping their talent find growth opportunities within their own walls. Adjustments might need to be made, but the most detrimental result for our industry would be if the Canadian tech sector starts treating its employees like they matter less. Tech workers in Canada have many career options, and if they don’t find growth and employers who respect them in Canada, they will surely look in other directions to keep progressing.
Q: What’s contributing to the hiring freezes from Canadian tech companies?
JS: There’s a combination of factors contributing to the hiring freezes that are happening. First, stock markets are hitting tech and tech investors hard, with higher shareholder pressure. This is combined with inflation (higher costs), supply chain issues, and maybe just a good old-fashioned hangover from some of the more irresponsible investing that happened over the past 18 months.
Q: Do you think the layoffs and hiring freezes will limit innovation in the Canadian tech sector?
JS: No, not at all. As long as this talent is getting hired by new tech, there will be innovation. In many ways, the Canadian tech sector is like a giant tree that drops a bunch of seeds around it, only to have more trees grow. A lot of homegrown talent is cut from great, highly innovative companies, and that talent will push forward with their skills to other companies where substantial growth is taking place.
Q: How can reskilling and upskilling staff help tech businesses throughout periods of economic slowdown?
JS: As companies lose some of their more expensive senior employees or cut specialized roles, internal talent upskilling can make sure to cover those gaps. By focusing on the people you already have, internal reskilling can help bring over cheaper and loyal talent who already know your company and the customer and can now start building technology solutions for them. In times like this, upskilling and reskilling are critical for companies and individuals alike, as the onus is on both to get the most out of the team and job opportunities in front of them.