tech layoffs toronto

Another major Toronto tech company just laid off a bunch of employees

Toronto's once-booming tech sector continues, alongside its global counterparts, to navigate choppy waters amid what some experts fear is an industry-wide economic recession (or not.)

Some major players in Canadian tech have addressed financial struggles with operational adjustments, such as eliminating or downsizing their physical work spaces. For most, however, economic uncertainties have been translating into widespread layoffs.

Just days after Google confirmed that Canadian employees would indeed be among the 12,000 staff cut from its global workforce this year, one of the country's most-successsful startups has announced that it, too, is laying off 14 per cent of its employees.

Koho Financial, a Toronto-based fintech company that provides financial services geared toward millennials, confirmed to BetaKit on Wednesday that around 42 staff (full, part-time and contract) are being cut from the nine-year-old startup, leaving it with a total of 300 workers.

The company's founder and CEO, Daniel Eberhard, said late last year (after laying off 15 employees) that its cuts were based not on market conditions, but a result of restructuring efforts.

This makes sense, as the company is still actively hiring for more-senior roles in some departments, and appears to be thriving financially.

Just three months ago, Koho was hailed as one of 17 Toronto tech companies forecast to surpass $1 billion in annual revenue for the first time in 2023, "with growth rates that match the top one per cent of companies in the world."

Koho, which is headquartered in Liberty Village, was also recently named one of the best places to work in Toronto for 2023 on account of generous employee benefits that includes full health coverage, tuition reimbursement, flexible working arrangements, a $1,400 healthcare spending account and 100 per cent maternity leave top-up for 12 weeks.

It's also flush with investor funds, having raised another $210 million in a Series D funding round last February.

"With the current market conditions, even well-capitalized companies are being more prudent about where they spend capital," explained BetaKit when announcing Koho's latest workforce cut.

"Investors, who are facing their own trouble accessing capital in some instances, are also looking for their companies to be more reserved in their spending, which can lead to pressure to make company layoffs."

Whether Koho is being more prudent with money due to looming economic worries, or simply refocusing its resources in different parts of the company, dozens of people have lost their jobs as a result, and they're far from alone.

The tracking website reports that, as of Wednesday, 321 tech companies had already laid off 97,996 employees around the world in 2023 alone.

Nine of those companies are based in Toronto, and have collectively shed at least 400 positions.

Thousands of jobs were similarly and unexpectedly killed in 2022, or earlier in 2023, at Canadian tech companies including Shopify, Hootsuite, Clearco, Properly, TealBook, Swift Medical and WealthSimple.

Giants like Amazon, IBM and Salesforce have all recently cut tens of thousands of workers, further stoking concerns about a tech recession, but some say we're merely seeing the results of post-pandemic rejigging and / or pivoting to new areas of growth.

ADP chief economist Nela Richardson told CNBC at the end of January that, scary and disruptive as the mass layoffs look, big companies are "still investing in building future technology, and by extension, workforces."

Pointing to Microsoft, which last month announced a multi-billion dollar investment into OpenAI (creator of the wildly popular ChatGPT) just days after laying off some 10,000 people, Richardson told NBC that "we're not in a recession yet" and that we "may not realize we're in one until it's over."

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