The technology sector has been a savior for thousands of Toronto workers during the pandemic: as service workers were laid off during lockdowns, the tech companies sucked them up, giving many a chance at new, more lucrative careers.
But now it’s the tech sector that’s under duress: Over the past few months, major companies like Wealthsimple, Thinkific Labs Inc., Clearco and Coinsquare have laid off hundreds of workers each, and total layoffs number in the tens of thousands sector-wide. With talk of a recession, a sharp downturn in online shopping and inflation cutting into bottom lines, technology sales have been sagging and stock prices have been slumping.
According to data tracker Layoffs.fyi, so far in 2022 448 startups have laid off a sum total of almost 62,000 people. Ritual, Wealthsimple, Clearco and Touchbistro had by far the biggest layoff rounds in Toronto this year, but none of the Canadian companies cut as deeply as Ottawa tech darling Shopify.
The e-commerce company announced it would lay off 10 per cent of its staff last week, or around 1,000 people, and networking platform LinkedIn has been flooded with layoff announcements, job-hunting posts and words of sympathy from those who survived the cut.
The Star spoke to some recently laid-off tech workers, as well as students poised to enter the tech world soon, and found that while they’re expecting a more difficult year ahead, none of them regret their career choice — their long-term expectations are still rosy.
As the Shopify layoffs unrolled, Victor Escobedo could sympathize with those affected, as he had been laid off himself less than two months earlier after eight years in the tech industry.
Escobedo had been working for a small Web3 company, and for the entire time he had worked in tech, he had only ever changed jobs of his own volition.
“It’s a little weird,” said Escobedo.
Escobedo had always felt secure in tech, but earlier this year, when he began hearing about major tech companies laying off people, he knew he could be next. After all, most of the roles being cut weren’t developers or engineers, but people-focused roles like his — customer service, recruitment and others.
But still, it happened sooner than he expected.
Now, the job market seems to have changed for Escobedo. He’s sent his resume out “thousands of times,” doing all the right things, but isn’t getting bites. It’s an uncertain time, but he’s approaching it with optimism and working on his own startup while he finishes college.
He thinks the job market will stabilize sometime next year, but is bracing himself for a bumpy ride in the short term.
“There are more layoffs coming for sure,” said Escobedo. “This is going to be a tough year.”
For students who chose tech for its myriad applications and strong job market, the layoffs are a potentially troubling portent of what awaits them after graduation.
Komal Saini, an undergraduate computer science student at the University of Toronto, said she’s always been optimistic about her job prospects because of the wide application of computer science across different industries.
But hearing about swaths of layoffs and rescinded job offers was a “wake-up call,” said Saini in an email.
“I’ve felt more pressure to figure out what I want to do after graduation,” she said. “How do I differentiate myself from the thousands of candidates that will apply to the same jobs as me? How do I put myself in a position where I’m not easily replaceable or disposable?”
Saini, who is currently interning at a startup in San Francisco for the summer, said though she previously felt confident about her university, degree, and internships, now she’s questioning she has done enough to secure a future postgrad. Many of her friends are now considering graduate school for the first time to try and gain a competitive edge, she said.
“It’s been nerve-wracking to see fear-driven choices being made as a result of the current climate, both in myself and in students around me.”
But there is hope on the horizon. Megha Kumar, vice president of research, software and cloud services for IDC Canada, said Canada has a thriving tech industry, and the recent lineup of layoffs won’t affect the attractiveness of the industry over the long term.
The companies that enacted layoffs made bets on the market based on the supersized focus on tech caused by the pandemic, she said.
As a result, “a lot of hiring took place.”
Now, with inflation hitting companies and consumer demand shifting in the post-pandemic-restriction world, these companies are being forced to rationalize their current workforce and narrow in on their product, she said.
But in the long term, the tech industry in Canada will continue to grow, said Kumar. She noted that while several large companies have had layoffs that made headlines, many other companies are continuing to hire, some even scooping up the talent dropped by the likes of Shopify.
It’s something that even those who were laid off have noticed and taken heart in.
Despite being laid off from her co-op placement, Vancouver student Ash Peng is optimism about her career choices.
Peng moved to Canada from China in 2019 to study computer science, a career shift for the former translator.
The fourth-year student’s co-op ended a few months early and abruptly, with the company laying off its two students and her own supervisor for financial reasons.
“I was shocked,” said Peng, who realized as she heard about other companies doing layoffs of their own that the sector was going through a “down period.”
But Peng doesn’t think the layoff is a bad omen for her postgrad career chances. She thinks this down period is temporary, and is confident she will find a place for herself in the industry.
“Lots of companies are also hiring,” she said. “It’s not like the tech industry is totally dead.”
Arjun Sharma is confident, too.
He graduated from the University of Toronto in 2019 and has had consistent employment in tech ever since, first at a startup and then at Ritual. After surviving one round of layoffs at Ritual in 2021, Sharma was laid off earlier this year — but already had another job lined up.
“I’m still seeing people get hired,” he said, adding that he still hears from recruiters on LinkedIn.
Interesting, he has thought about what he would do if he was laid off with no new job on the way. Sharma has been working on some side projects, some of which earn him money. He calls them passion projects, but says they also make him feel more secure in light of the headline-making layoffs in Canadian tech.
In the long run, though, Sharma thinks the industry is just going through a period of rebalancing after the boom.
“Even my current company is continuing to hire and grow,” he said.
“I think it’s always going to be a growing industry.”
With files from The Canadian Press
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