Tech companies are starting to ease off the accelerator on hiring, a sign they’re not immune to the prevailing economic uncertainty, according to research from RBC Capital Markets.
Posted at 4:30 p.m.
The number of job postings at the top 10 information technology companies fell 32% from a year ago during the second quarter, according to a review by RBC Capital Markets.
This downward trend is generalized for the entire sector, notes analyst Paul Treiber. 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 would indicate that some companies in the information technology sector may be more cautious in their hiring and investment plans, due to macroeconomic uncertainty,” said the analyst.
The job market seems more resilient in Canada, according to the review by RBC Capital Markets. The number of job postings remains up by 1% compared to the previous quarter or by 25% compared to the same period last year.
This is still a slowdown compared to the quarterly increase of 11% and the annual increase of 72% recorded in the previous quarter.
The news has been gloomy for employment in Canada’s smaller tech firms. Accustomed to easily finding capital to feed their growth ambitions, start-up began to manage their finances more tightly due to the sector’s debacle on the stock market, the rise in interest rates and the return to a more “normal” life which reduced consumers’ appetite for certain services virtual.
In June, the fintech Wealthsimple has laid off 13% of its workforce. In a letter to staff, chief executive Michael Katchen said the company plans to focus on its core business and reduce investment in other areas like tax services.
The prepared meal specialist Goodfood Market, for its part, announced a 2.8% reduction in its workforce while the company lost customers in the wake of the health restrictions.
The situation is quite different for Montreal-based Lightspeed Commerce. 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 hiring mode. There were 300 positions open last quarter and they have been filled. There is constant growth. »
A job market still strong
Despite three consecutive quarters of slowdown, the job market remains relatively resilient for large firms in information technology, nuance Mr. Treiber.
The companies in his sample had 77,000 job postings worldwide for the three-month period comprising the months of April, May and June. Before the pandemic, in the first quarter of 2020, that number was 48,000.
“The recent downturn suggests turnover or demand is moderating,” he says. Both are likely to remain elevated from pre-pandemic levels. Lately, some tech companies have seen turnover rates approaching 20%. »
The portrait at CGI
The situation at the Montreal multinational technology consulting company CGI evokes the slowdown observed in recent months, even if the demand for new employees remains strong compared to the pre-pandemic threshold.
Job postings in Canada were down 14% quarter over quarter or 4% from a year ago, according to RBC Capital Markets.
The number of jobs posted in Canada, or 807, remains however well above the quarterly average before the pandemic, at 448 for the 2018 and 2019 fiscal years, underlines the analyst.
The second quarter of 2022 is also the third-largest since 2016 for the number of job postings, Treiber points out. “CGI is proactively investing in expanding its workforce to generate organic growth. »