Jun 13, 2022
A wave of job cuts has hit the American tech sector with markets cooling in recent weeks, and industry watchers expect the trend to spread to Canada over the coming months. This marks a sweeping change from the industry’s performance over the course of the pandemic, when stimulus funding, low interest rates and an accelerated shift to digital technology contributed to record years in venture capital fundraising and initial public offerings, as well as steep competition for talent. Some Canadian tech firms have already announced layoffs or hiring freezes, as venture capital firms warn their portfolio companies to reduce costs and preserve cash in the face of the newly tightened market — and what could become a prolonged downturn.
“What we're typically seeing now is that it is becoming harder to raise capital,” Chad Bayne, partner and co-chair of Osler’s Emerging and High Growth Companies group, tells The Globe and Mail.
“Last year it was crazy. But I can't see us doing another $50-million financing any time soon. There appears to be no appetite for it right now. Everyone has been so conditioned to the good times they forgot what the not-so-good times actually look like.”
If you have a subscription, you can read the full article, “Big hit in store for Canadian tech sector as wave of layoffs looms, industry players say,” on the Globe and Mail’s website.