layoffs in canada
On June 15, Wealthsimple – the fintech company that manages about $15 billion – laid off 159 employees, Shopify left 1,000 employees on July 26 and VC Startup Clearco [125 employees (a quarter of its staff)] (https://betakit.com/clearco-cuts-a-quarter-of-staff-amid-significant-headwinds/) on July 29.
Big US companies are also making large-scale ripples in Canada. In August, Ford Motors laid off 3,000 employees globally, cutting 120 jobs in Canada. After seeing its shares plunge 20% in August, Bed Bath & Beyond Inc. Job cuts and store closings around the world.
“There is always turmoil in the labor market, and there are sectors and companies that end up doing poorly, and have to lay off workers,” says Pedro Antunes, chief economist and keynote speaker at The Conference Board of Canada.
In early September, Statistics Canada reported that the nation lost 39,700 jobs in August, the third consecutive month of job losses, surprising some economists. The educational services and construction sectors were the main drivers of this decline.
While education services may experience changes due to their seasonality, the effects seen in the construction sector indicate that the economy is starting to slow down. This is to be expected due to the repeated rate increases by the Bank of Canada this year, in an attempt to slow inflation.
Statistics Canada also said the decline was offset by gains in employment in professional, scientific and technical services.
“In residential construction, I think we’re starting to see things really improve because home sales are basically back to normal,” Antunes said.
“In a way, this isn’t a bad news story,” he added, considering that monthly numbers “can be very choppy, especially as we start getting into the reporting industry.”
As for job losses in education services, Antunes said he will wait “a month or two” to see if there is an emerging trend in the sector.
At the height of the pandemic, sectors that provide e-commerce services, or those that provide durable goods, have already taken off. With the pandemic waning and the world opening up, the demand for personalized experiences and services has rebounded, and the demand for e-commerce services has fallen.
“Things are getting back to normal,” Antunes added. “So some of these sectors are starting to see some softening.”
The same can be said for the real estate market, which has reached new highs, but is now seeing a correction with one report from TD Economics predicting that Canadian home prices could fall as much as 25% in 2023.
At the same time, Antunes added, there are sectors and companies that are doing well and are looking for workers.
CTO Says ‘We’re Hiring’
The news of thousands losing their tech jobs does not reflect the entire industry.
Extrapolating trends from events such as technical layoffs leads to inaccurate conclusions, says Michael Continto, managing partner and executive director of commercial innovation at IT service management firm F12.net.
“To say the tech sector, it’s very broad and very vague language,” Contento says.
“We are hiring,” Contento adds. “We are in a growth mode.”
Job search site Indeed also asserts that “several companies have been hiring for tech positions in the past six months”.
Jobs like cloud engineer and Python developer are currently more popular with major banks and financial services companies, according to Indeed.
Other areas of high demand include health care and social assistance. Statistics Canada reported that these regions had a record number of vacancies in the second quarter of 2022. Vacancies in the accommodation and food service sector are also on the rise, with a 12.7% increase quarter-on-quarter.
‘Big resignation’ and more desire for employment
Aside from market forces, there are also some cultural and demographic factors at play.
“We’re still going through a ‘big resignation’ after the pandemic and we’re still having, it’s not a very difficult time to find talent, but it’s not as easy as it used to be,” Conto said.
Despite economic indicators pointing to a possible “moderate” recession, expected to officially start in early 2023, it could be one of the best times to get a job.
A survey by Robert Half Canada indicates that 47% of managers reported an increase in voluntary turnover in their departments in the past year. In response, two out of five managers said they initially increase their salaries.
They also report that more than 30% offer remote options or offer signing bonuses. Another 31% ease education, skills or experience requirements. Telecommuting continues to be a strong attraction, with 30% of employers looking for candidates outside their company’s geographical area.
Big resignation or great retirement?
To add fuel to the fire, the Canadian job market is seeing more people retired or about to retire.
Statistics Canada reported that as of August, 307,000 Canadians have retired from their jobs over the past year. This is a 31.8% increase over the previous year, and 12.5% more than in 2019.
“We’ve always assumed that the natural rate of unemployment in Canada was probably somewhere around 6%, even in a tight labor market in the past,” Antunes said. “We’ve never kind of gone without that in a sustainable way.”
“I think basically what we’re seeing is the pressure of people leaving the workforce, the post-World War II baby boomer group is really ramping up their retirement now.”
It appears that early retirement may continue the trend in the near future. A survey by RBC Insurance indicated that more than a third of new retirees decided to retire earlier than planned and another 30% of retirees intend to change their retirement date due to the coronavirus pandemic.
Canadians are taking on extra jobs
To add another twist to the work situation, it appears that more Canadians are choosing to add an additional part-time job. This may be due to the rising cost of goods and services due to inflation.
“Temporary employment opportunities have helped increase the incomes of many Canadians over the past years and certainly in the years leading up to the pandemic,” Antunes said.
“And that has probably been the continuing trend; there is no doubt that there is a lot of pressure on household incomes at the moment.”
The trend appears to be continuing and even increasing for Uber.
“People who are signing up to drive on the Uber platform in Canada are at one of the highest points since the pandemic began,” says Kirtana Rang, head of corporate communications at Uber Canada.
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