Canada’s Tech Job Market Faces Dramatic Downturn in 2023

Canada’s tech job market has experienced a significant downturn over the past few years, according to a recent report from job postings site Indeed. The study, released on August 15, 2023, indicates that job openings in the sector were down 19 percent compared to levels seen in early 2020. This decline marks a stark contrast to the rapid growth observed during the pandemic.

Brendon Bernard, a senior economist at Indeed, highlighted the ongoing challenges within the Canadian tech industry. “The Canadian tech world remains stuck in a hiring freeze,” he stated. Bernard noted that while both the tech job market and the overall job market have cooled off since their peaks in 2022, the decline in tech has been particularly pronounced.

The report suggests that several factors contributed to this downturn. The initial surge in tech hiring during the COVID-19 pandemic, driven by increased demand for e-commerce and digital services, has since waned. As the crisis subsided and inflation rose, the demand for online services reverted to patterns more typical of pre-pandemic times. This shift led to significant layoffs at prominent companies, including Shopify Inc., which were forced to realign their workforce strategies.

Bernard elaborated on this transition, saying, “We went from this really hot job market with job postings through the roof to one where job postings really crashed, falling well below their pre-pandemic levels.” The introduction of artificial intelligence (AI) has further complicated the landscape, with many firms reassessing their hiring needs. The emergence of technologies, such as chatbots and machine learning applications, has enabled companies to automate routine tasks, reducing the need for entry-level positions.

While the overall trend has seen a decline in tech job postings, Indeed’s analysis reveals a nuanced picture. Although hiring for software engineering roles has decreased, demand for AI-related positions remains robust. In fact, roles such as machine learning engineers and data center technicians are still seeing job postings above early 2020 levels. This reflects a growing emphasis on AI infrastructure within the industry.

Additionally, while senior and managerial tech positions have also experienced a downturn since 2022, postings for these roles remain five percent higher than pre-pandemic levels. Conversely, basic and junior tech roles have seen a sharp decline of 25 percent.

When comparing Canada’s tech job market to other advanced economies, the findings reveal that the decline in tech job postings is somewhat less severe. The United States has seen a 34 percent drop, the United Kingdom 41 percent, France 38 percent, and Germany 29 percent. Bernard emphasized the global nature of this trend, stating, “This tech hiring freeze is a global tech hiring freeze.”

Interestingly, Indeed identified a few advanced economies where tech job postings remain above early 2020 levels. Australia, Spain, and Singapore stand out as exceptions, where overall job postings continue to be elevated.

As the Canadian tech job market navigates this significant transition, the future remains uncertain. The interplay between technological advancements and workforce needs will likely shape the industry’s recovery in the coming years.