Big tech jobs are vanishing, once-free-flowing venture capital money is drying up, but that is not necessarily bad for the industry, some experts say.
With Facebook-parent Meta set to announce layoffs just days after Twitter slashed its workforce following Elon Musk’s takeover, the cuts could be a blow to a Canadian tech industry that has already seen its share of struggles recently. Jobs are vanishing, and once-free-flowing venture capital money is drying up, Canadian tech industry analysts say. But that is not necessarily bad for the industry.
“When interest rates go up, the growth stories are the ones that are usually going to be impacted the most initially, and that’s usually tech,” said Bayne, a partner at law firm Osler Hoskin & Harcourt. “The investors that were there a year ago, the Tigers, the Fidelitys, the Altimeters, are just not deploying capital right now. So if you don’t have a source of readily-available capital, then you need to change your tack,” said Bayne.
Still, argued veteran tech investor Sunil Sharma, things aren’t quite as grim as they might seem at first glance. Bayne agreed that it’s not a crisis, saying that many companies Osler Hoskin & Harcourt works with are in good financial shape. “Any time I see a headline about a larger tech company laying people off, I tell the CEOs of the companies in our portfolio to keep an eye out. There is a lot of talent out there, and I think they’re more open to coming to a start-up,” said Sharma.
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