Snowflake is set to hire hundreds and open an office in Toronto to support the payment of giant cloud applications in the US

Snowflake will accommodate new employees on the 50,000 square feet of space in the east tower of the Brookfield Properties building.Fred Lom/The Globe and Mail

US cloud computing giant Snowflake is opening its Canadian headquarters in downtown Toronto and planning to hire hundreds of engineers, welcoming news of a largely empty business district and a local tech sector bracing for massive layoffs.

Bilal Khan, Snowflake’s head of Canadian operations, said the development hub will support the company’s new internal market filled with applications built by third-party developers for Snowflake customers. The company announced its app market plans Tuesday at a users conference in Las Vegas.

Snowflake joins other digital platform companies for business, including Shopify Inc. and Salesforce Inc. , which has similarly boosted its growth by supporting application markets.

“Our Canadian footprint will not only become significantly larger, but also significantly more strategic,” Mr. Khan said in an interview. “The native applications portion of our platform is a big part of Snowflake’s future, in terms of direction and the underlying infrastructure for what our business will look like.”

The new hires will be housed in a 50,000-square-foot lot in the east tower of Brookfield Properties’ Bay Adelaide Center in Toronto’s financial district. Mr Khan said its footprint could multiply as the company expands its operations, adding that it is likely to have a hybrid business model. Snowflake currently employs about 100 people in Canada, spread over various positions, including 10 to 20 engineers.

Snowflake, based in Bozeman, Montana, stores data for 6,300 customers globally on its software platform, which is in turn hosted by physical public cloud data center operators, including Amazon Web Services, Microsoft and Google. Snowflake said in early 2021 that it would open an engineering site in Toronto.

Tuesday’s announcement is a positive sign for downtown Toronto, which has struggled with multiple rounds of COVID-19 restrictions and lengthy work-from-home mandates, leaving many office workers working from home at least part-time.

The office vacancy rate in the region was 8 percent in the first quarter of this year, according to commercial real estate services firm Avison Young. This is the highest in two years due in part to the opening of a large number of new skyscrapers. The number of branch stores available as a percentage of total available office space was 23 percent in the first quarter, according to Avison Young. This is down from a high of 36 percent in the last quarter of 2020.

Although more workers are beginning to return to offices, volume is still about 25 percent of pre-pandemic occupancy levels, according to early June data from the consulting firm Rigging Research Alliance, which estimates that up to Up to 40 percent of employees work out of the office at least once a week.

Office owners often point to the growth of the tech industry as a reason why demand for their space hasn’t fallen back, although many tech companies have indicated they may continue to operate nearly as long after the pandemic.

Meanwhile, times of anxiety are back in the tech sector as early-stage companies try to rein in spending and conserve cash to prepare for what some fear could be a prolonged recession. Industry experts expect the widespread job cuts already underway in the United States to follow in Canada in the coming months.

“I fully appreciate how challenging the environment is for many companies,” said Mr. Khan, former head of data across North America for professional services giant Deloitte. “We are in a hyper-growth mode. Nothing has changed in our core business drastically. We are still growing at an exceptional rate and we still intend to grow strongly.”

Other foreign tech companies are also still expanding in Canada, spurred by the country’s strong talent pool and generous tax breaks. For example, Oxbotica Ltd. British Autonomous Vehicle Programs is set to expand its Toronto engineering office – the company’s first office outside of its Oxford headquarters – to 50 people next year, compared to six, a spokeswoman said.

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