The headlines represent an about-face: tech, the sector that boomed as COVID-19 kept us more online and digital than ever, has been deeply gouged by layoffs as the pandemic has waned.
In January alone, Microsoft, Amazon, and Alphabet Inc., Google’s parent company, each announced they would be laying off thousands of people. And it’s not only Big Tech that is tightening its belt.
Numerous Canadian tech unicorns, companies, and startups – including Benevity, Hootsuite, Revelate Data, Bridgit, PartnerStack, and SSENSE – have also laid off staff in recent months, according to BetaKit.
Although the number of jobs shed at a startup are less eye-popping than those at, say, Google, BetaKit’s Meagan Simpson reported in January that “the impacts of these cuts is much more significant to a startup’s bottom line and burn rate.”
All told, layoffs aggregator Layoffs.fyi calculated that globally, almost 160,000 tech workers were laid off in 2022 – and just over 100,000 jobs have been lost since 2023 began.
So with stats this bleak, why are some experts saying tech workers shouldn’t panic?
Let’s examine what happened in tech and the job outlook in Canada.
The trouble in tech
It might be a cold comfort to hear the tech sector’s contraction was expected, but it’s what some experts told CBC News last month.
Alex Zukin, the managing director at Wolfe Research, said some tech companies rapidly expanded as life shifted largely online during the pandemic, and executives gambled that it would stay that way.
That’s not what happened, however — and now, as layoffs slashed through staff from Microsoft to Canada’s own Shopify, Zukin told CBC News that “many companies are right-sizing.”
Meanwhile, BetaKit reported that rising interest rates, pressure to match competitive tech salaries and “the need to set their companies up for long-term sustainability” were some catalysts for layoffs at smaller Canadian tech startups.
And for them, business might get even harder.
Some venture capitalists predict that when it comes to fundraising, Canadian tech startups – and particularly early-stage founders – are likely to continue to struggle.
“We’re in an inflationary environment that we haven’t seen in the last 40 years,” Aleeza Hashmi, an investor with Bessemer Venture Partners, said on a SaaS North panel hosted by BetaKit’s Simpson in November.
“The next four to six months are probably the hardest environment to raise in the past decade.”
And the segmentation of companies in Canada is “becoming more prominent,” said Georgian investor and fellow panelist Michelle Yu.
“I think the companies that have been struggling are, to be honest, continuing to struggle,” Yu said.
“Their focus is really: how can we extend our cash runway? How can we achieve profitability? Or, how can we look towards a potential exit?”
The panelists noted maintaining morale, culture, and productivity is an issue for CEOs who are decreasing their workforces, while the BBC reported in February that the destabilization has swirled anxiety about job security among workers.
“Every morning, before I even get out of bed, I’m overcome by a sense of dread,” a 41-year-old New York City tech worker, whose name was withheld to keep from impacting her career, told the outlet.
“I’m basically 100 per cent sure that one of these days, I’ll get the email saying that my position’s been eliminated.”
And tech companies, The Canadian Press reported last month, can now be “more choosy about hiring and less generous with salaries.”
“An employee can’t walk into the interview and ask for everything under the sun anymore,” Abdullah Snobar, executive director of the DMZ tech hub in Toronto, told The Canadian Press.
Job creation, recruitment persist
Here’s where things get more optimistic for tech workers: despite the corporate bloodletting, it appears that jobs are available to make up for some of the losses.
For example, the tech sector in Canada actually spurred significant job creation in December – a month that saw more than 100,000 jobs added to professional, scientific, and technical services companies, CBC said.
And it isn’t alone in reporting that opportunity persists in Canada’s tech industry.
Recruitment agencies told The Globe and Mail in January that tech jobs related to e-commerce, online infrastructure, and cybersecurity are still highly in demand, while “growth marketing managers and product operations managers are projected to be some of the most in-demand roles for 2023.”
What’s more, LinkedIn news editor Jessy Bains told The Globe in an email that laid-off tech employees tend to get nabbed by other tech companies – fast.
“When we hear about layoffs, we often see other tech companies swoop in and hire laid-off employees,” Bains said.
Aaron Terrazas, chief economist with GlassDoor, echoed the sentiment to the CBC.
“Through December, it looks like a lot of tech workers that were laid off early in the cycle have found new jobs relatively quickly,” Terrazas said.
“The tech skill set, be it engineering or data science, is incredibly valuable.”
Standing out
Experts also told CBC that supply still isn’t meeting demand for tech workers, in part because the need for technological expertise is growing at companies outside of the sector.
“I’m not concerned that the technology trend is going to stop here or technology spending is going to stop forever,” Anurag Rana, a senior technology analyst with Bloomberg Intelligence, said.
“It’s just a temporary pause.”
Still, if laid-off tech workers are looking to stand out in a job market that looks increasingly competitive, Forbes contributor Sarah Doody recently suggested that soft skills are assets worth emphasizing.
“Communication, critical thinking, problem solving, team work, and worth ethic are highly transferable between industries and can often be the difference between you receiving job interviews and offers or not,” Doody wrote.
Highlighting those skills on resumes, LinkedIn profiles and during interviews are a few ways to give yourself a boost.
And if you aren’t sure what your soft skills are, Doody recommended asking friends and colleagues.
“Hard skills such as software and methods change,” Doody wrote. “But soft skills are timeless.”