According to a study by RBC Capital Markets, tech companies are beginning to slow the pace of hiring, a sign they are not immune to the prevailing economic uncertainty.
Posted at 4:30 p.m
The number of job postings at the top 10 IT companies fell 32% year over year in the second quarter, according to research by RBC Capital Markets.
This downward trend applies to the entire industry, notes analyst Paul Driver. He notes that 7 of the 10 companies in his sample posted fewer jobs in the second quarter than in the previous quarter.
“The slowdown suggests some companies in the IT sector may be more cautious about their hiring and investment plans due to macroeconomic uncertainty,” the analyst said.
According to the RBC Capital Markets review, Canada’s job market appears to be more resilient. The number of job postings increased by 1% compared to the previous quarter and by 25% compared to the same period last year.
That’s still a slowdown from the previous quarter’s 11% quarterly increase and 72% annual increase.
The news for employment in Canada’s smaller tech companies has been grim. Accustomed to finding capital easily to feed his growth ambitions, tarnishing started to manage their finances more tightly due to the industry’s debacle on the stock market, the rise in interest rates and the return to a more “normal” life that has virtually reduced consumers’ appetite for certain services.
In June, the fintech Wealthsimple has laid off 13% of its workforce. In a letter to employees, Chief Executive Michael Katchen said the company plans to focus on its core business and cut investments in other areas, such as tax services.
For its part, ready meal specialist Goodfood Market announced a 2.8% job cut as the company lost customers amid health restrictions.
The situation is very different with Lightspeed Commerce from Montreal. In June, CEO Jean Paul Chauvet said in an interview with The Canadian Press that the cloud commerce specialist had 300 open positions in Montreal, where 800 of its 3,000 employees work. “We are still in recruitment mode. In the last quarter, 300 positions were open and filled. There is constant growth. »
A labor market that remains strong
Despite three consecutive quarters of slowdown, the job market for large information technology firms remains relatively resilient, Mr Driver added.
The companies in his sample had 77,000 job postings worldwide for the three-month period spanning April, May, and June. Before the pandemic, in the first quarter of 2020, it was 48,000.
“The recent downturn suggests that sales or demand are slowing down,” he says. Both are likely to remain elevated from pre-pandemic levels. Recently, some tech companies have seen turnover rates approaching 20%. »
The portrait at CGI
The situation at Montreal-based multinational technology consultancy CGI is reminiscent of the slowdown observed in recent months, even as demand for new hires remains strong compared to the pre-pandemic threshold.
According to RBC Capital Markets, job postings in Canada were down 14% sequentially, or 4% year-on-year.
However, the number of jobs advertised in Canada, or 807, is 448 for fiscal years 2018 and 2019, well above the pre-pandemic quarterly average, the analyst points out.
In terms of the number of job advertisements, too, the second quarter of 2022 will be the third-biggest since 2016, said Driver. “CGI is proactively investing in expanding its workforce to generate organic growth. »