By Déjà Leonard* – June 2022
According to layoffs.fyi, a site that tracks layoffs in the tech sector, nearly 17,000 workers from more than 70 tech startups around the world were laid off in May 2022. This figure represents a 350 per cent increase from April, and is the largest number of tech jobs lost since May 2020
While many of the current layoffs are coming from U.S. companies, industry watchers say the tech sector in Canada will be hit hard and the staff reductions have already begun.
On Wednesday, June 15, Michael Katchen, co-founder of the Canadian fintech company Wealthsimple, posted an announcement to his LinkedIn page titled “Important changes to our business.”
The public memo goes on to address the Wealthsimple team and the layoffs.
“Today, the news at our all hands meeting was a lot harder to deliver. For those who weren’t in the meeting, I announced that because of changes to market conditions, we’ve made the difficult decision to reduce the size of Wealthsimple’s work force,” Mr. Katchen wrote.
Wealthsimple was laying off 159 of its 1,262 employees.
“Our objective is to provide clarity to all of you as soon as possible. In the next few minutes, team members who will be leaving Wealthsimple will receive a calendar invite for a departure meeting scheduled for today,” the memo continued.
However, Natasha Mascarenhas of TechCrunch said that there is a key difference between the pandemic-related layoffs of 2020 and what we’re seeing now.
“The difference between layoffs in 2022 and 2020 is that many of the companies that are laying people off today are well capitalized, named unicorns just one year ago. In 2020, cuts could easily be attributed to an unprecedented pandemic that complicated growth plans; while in 2022, cuts came right after leaders boasted insane growth just months prior,” Mascarenhas wrote.
Wealth coach Mandi Woodruff-Santos, who has been covering business and finance for more than a decade, said these layoffs have been “a long time coming” since we have fundamentally seen our economy go through so many changes in the last few years.
She also provided insight around the bigger picture of what’s going on in the industry.
“We lost a few thousand jobs in tech, but we also added 16,000 jobs in tech, okay? Thousands more in information technology, so – and that’s coming from sites like Glassdoor. Indeed is also reporting 50 per cent increases in new job postings,” she said on Yahoo Finance live.
Regardless, there is still uncertainty for many tech workers right now. Employees can try to get ahead of layoffs by updating their resumes as soon as possible, starting an emergency fund and researching their company’s policy for severance packages so they are aware of what the reality will be if they do get laid off.
Déjà Leonard is a freelance journalist and copywriter.
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