The tech layoffs may only be getting started: Jeff Weniger
Shopify Inc.'s layoff this week will add a slew of new workers to the job-hunting pool at a time when experts say candidates are taking longer to find their next gig.
"The question is will they immediately find that (next job)? Maybe not," said Tricia Williams, director of research at the Future Skills Centre at Toronto Metropolitan University.
"There might be some...transition disruptions as they sort out what their next move is."
The lengthy job hunt is being partially caused and exacerbated by a wave of layoffs that began last year and has continued in 2023 with companies as large as Google, Amazon and Meta cutting workers.
Many of the companies that made head count reductions attributed the moves to their leaders having misjudged demand for their products as people return to pre-pandemic habits.
However, the chief executive of Ottawa-based e-commerce software giant Shopify, said the Thursday staffing reduction he carried out was meant to refocus the company on its main mission and reduce distracting "side quests."
The company refused to give the number of staff that would be departing the company in its second layoff in the last year, but said it amounted to about 20 per cent of staff.
A regulatory filing showed Shopify had 11,600 employees at the end of 2022. Twenty per cent of that amounts to about 2,300 people.
Despite the layoff, Williams said that tech workers are still in high demand in Canada, something April Hicke, co-founder of women's tech and hiring collective Toast, is also seeing.
However, both said the job market those laid off from the sector are facing has changed since before and even during the early stages of the pandemic.
While hiring is steady for engineer, cybersecurity and artificial intelligence roles, Hicke said sales, people and culture and product job are less in demand and more likely to be part of layoffs.
"While layoffs might generate headlines, probably the more substantial shift in the job market is really the hiring freezes that have happened at lots of places," said Brendon Bernard, senior economist at job posting site Indeed.
Software development postings on his company's website last spring were more than double their pre-pandemic level, but have "given all those gains back" and are slightly lower than they were in February 2020.
Those looking for jobs aren't being snatched up as quickly as they were at the pandemic's onset, when tech valuations skyrocketed.
"In Toronto, we're seeing about six months is how long it's taking people to find another thing, and more so in Calgary. I would say nine months-ish," Hicke said.
And many are taking a pay or title cut just to be employed again.
"We're seeing people who are definitely operating at a director level, taking manager positions because it's the only thing available," she said.
Whereas workers were jumping to roles that would pay them from $60,000 to $100,000 more at the height of the pandemic, Hicke now sees some taking 10 to 20 per cent pay cuts.
The average tech worker salary last year was $133,000, said Hired, an employment platform that compiles average annual salaries.
Its data based on 907,000 interviews across more than 47,750 active positions available between January 2019 and June 2022 in the U.S., Canada and the U.K. found almost 42 per cent of tech workers think employers have more power and doubt that will change in the near-term.
About 27 per cent felt jobseekers had more power but expected that to change in the near-term.
But Williams said, "I wouldn't quite say employers have the upper hand yet."
"We have both a labour shortage but also a skills shortage, so the people who are looking for work generally don't have the skills that are being asked for in the marketplace," she said.
"But I'm pretty confident that a lot of the Shopify workforce will have relevant skills for the broader labour market."
However, she said some laid-off workers might not find themselves in the traditional tech jobs or at the tech giants they are accustomed to working for.
That means tech workers could crop up in tech jobs in completely different sectors like agriculture, Williams said.
"They might not get a job specifically in tech, but tech is infiltrating every kind of economy."
For many companies who have long tried to lure over tech workers, the market's current conditions are a helping hand, Bernard pointed out.
"They might be finding it easier to find candidates just because there are other parts of the economy where demand for tech workers was so strong like a year ago and now has really come down to earth."
This report by The Canadian Press was first published May 5, 2023.