Deep job cuts in Silicon Valley could bring tech workers back to Canada

A northern Silicon Valley success story has placed Canada in the midst of the sudden plunge in fortune for the tech sector, and the hundreds of thousands of Canadians whose skill and ambition made them coveted engineers, programmers and leaders.

More than 150,000 tech workers have been laid off this year, according to an online tally. The cuts have been wide and deep, slicing across companies, global offices and nationalities – Canadians included.

But could their losses be Canada’s gain? It’s a potentially critical question for the entrepreneurs and visionaries who see a moment for this country to find serendipity in grim times.

The dramatic change in Silicon Valley’s fortunes has created an “opportunity for Canada to reclaim some of its talent,” said Jennifer Holmstrom, a Canadian who leads talent and recruitment for GGV Capital, a global venture capital firm.

The Canadian tech boom is fizzling out as more startups cut jobs, fighting to survive

For every job lost in California – or Seattle or Austin, Tex. – there is a chance “for Canadians to come back and for global talent to move here,” said Dan Burgar, co-founder of Frontier Collective, a Vancouver tech industry promotion group. In Canada, “we’ll start to see startups actually being able to scoop up some of this talent.”

That, at least, is the dream for tech companies north of the border.

But the rounds of layoffs also stand to reaffirm the long-standing struggles for Canada’s tech industry in luring the country’s best and brightest. While Canadian tech has become an increasingly attractive option for foreign workers – a trend that has accelerated this year as US layoffs take hold – for many Canadians, Silicon Valley remains a land of possibility whose glitter has only slightly dimmed in recent months.

When Trevor Lai left Toronto for a job in Seattle with Meta Platforms Inc., his salary quadrupled. Moving to the US has come with its share of troubles. His fiancée has not been able to secure a work permit there. His own status has become tenuous, too, after he was laid off in early November, when Meta shed 13 percent of its work force. “If I don’t find a job I will get kicked out of the US,” he says.

But his first priority is to remain in the US “Just because of the money,” he said. Even if he had been able to transfer his job at Facebook to Toronto, he calculated that his income would have fallen by 40 percent. “I’ve worked in several companies in Toronto,” he said. “The people there are amazing. Everything is awesome – except for the pay.”

At the same time, the tech layoffs have come during a year that has already seen a surge in skilled immigrants coming to Canada, and there are signs that job losses in the US may accelerate movements north.

The 4,882 applications for immigration to Canada under the Global Talent Stream program from January to October of this year are up nearly 70 percent over the total for last year – and a more than 10-fold increase over 2017, according to statistics provided to The Globe and Mail by Immigration, Refugees and Citizenship Canada. The Global Talent Stream is open to people working in innovation-related companies, with a particular focus on tech workers, including computer and software engineers, information systems analysts, programmers and video-game designers.

Applications for Canadian work permits by Indian citizens in the first 10 months of this year are also up 40 percent over last year, and more than triple the number from five years ago.

Indians hold nearly three-quarters of the H-1B visas granted by the US, a temporary work permit for specialized talent. They have been among the groups most seriously affected by tech layoffs, since H-1B visas are tied to employment. Those unable to find new jobs must leave the US within 60 days.

Over the past decade of frenzied tech hiring and acute worker shortages, H-1B visa-holders could treat the threat of expulsion as theoretical. Tech layoffs have made that possibility unnervingly tangible.

Canada can be an appealing alternative. Major US tech firms have already opened offices in Canadian cities, which have the added benefit of sharing time zones with their US counterparts.

Last year, Canada counted more tech workers than California; the tech worker population in the Toronto-Waterloo corridor may soon eclipse that of the San Francisco Bay area. “If it hasn’t already happened, it will happen within the next 12 months,” said Chris Albinson, president of Communitech, the Kitchener, Ont.-based innovation hub.

“Canada is actually set up really well to be the largest innovation hub on the planet right now. What’s happening now in terms of the movement of tech workers out of the US is going to do nothing but accelerate that benefit for Canada.”

In Silicon Valley, some have already prepared for this moment. The pandemic and Donald Trump’s presidency created enough fear that many Indian tech workers in Silicon Valley began filing immigration applications to Canada, said Sophie Alcorn, an immigration lawyer in the region. Today, “many have that as a backup option.” She estimates that between 5,000 and 15,000 H-1B visa holders have lost work in the last two months.

For many of those unable to find new jobs in the US, “if they can find a way to legally come to Canada, they would love that,” she said.

It’s not only those suddenly without work. MobSquad, which brings tech workers to Canada from the US and elsewhere, has been hearing from software engineers who are “actually the ones that didn’t get laid off, that there’s interest in considering hopping to Canada,” said founder and chief executive Irfhan Rawji.

“We think it is going to create another pretty dramatic opportunity for the growth of our business, just like COVID did.”

It’s not clear how much that will address one of the biggest needs in Canada’s tech sector: a shortage of what Ray Newal, chief executive of The C100, a Canadian tech diaspora organization, calls “people who understand what ‘great’ looks like.” Those with experience working in and growing companies with $100-million and more in annual revenue are the people who can help build startups into global successes. Tech layoffs provide a new opening to recruit such people into smaller Canadian companies.

“Hopefully we’re going to see an opportunity to build more Shopify’s,” he said. To do that, however, will mean countering what he calls a “bifurcation of ambition,” where Canadians looking to do big things have traditionally looked outside the country.

“They don’t feel that their ambition can be met here,” he said. Reversing that is not “something we have figured out how to do well enough yet.”

Anyone leaving the US has options that extend far beyond Canada, particularly with the rise of digital nomadism. People are “going to want to work from Mexico, from Barbados, from Bermuda,” said Hongwei Liu, founder of Mappedin, a Waterloo-based company that maps indoor spaces. “If you can take your laptop and work from anywhere, why are you in Ontario?”

That question is a fundamental one not just for tech companies, but for Canada as a country. “We believe the biggest indicator of long-term success in the tech ecosystem is going to be talent,” said Jeff Larsen, the Atlantic Canada site lead for Creative Destruction Lab, which helps to develop seed-stage companies.

mr. Larsen believes that the question of how to attract talent is often approached incorrectly. “It’s really creating the kind of community and city or region that people want to live in,” he said. Improving access to family doctors and transit may be more important than other measures.

Yet Canada has also seen enough tech success to make some ex-pat Canadians reconsider, especially as they weigh the political upheaval that has become part of life in places like the US When Morley Iver left Canada more than a decade ago, he found himself immediately at home as a tech entrepreneur in the US, where he became a citizen. “Being a founder was sort of recognized as someone who was living what people deemed was the American dream,” he said.

But, he said, “society inside America has become so polarized that for me as a Canadian, quite frankly it became too much to bear.” He recently moved back to Toronto to create Cookin, a food delivery service for homemade meals. “I realized that the best place in the world for me to build in 2022 was Canada,” Mr. Iver said. Toronto boasts not just cultural diversity, but “unbelievable tech talent – ​​and it’s a fraction of the price.”

Others are leaving the US in search of stability, including Indian citizens on H-1B visas who can wait decades to secure a green card. “I would call living on an H-1B in the US like living on the edge,” said Syed Naqi, a software developer and project manager originally from New Delhi. He knows people who had to sell everything they owned – cars and houses included – after their status expired “and then rush back to India.”

When Mr. Naqi’s own H-1B visa was set to expire, MobSquad helped him move to Nova Scotia.

Within 18 months, he received permanent resident status in Canada. He now lives in Cole Harbor with his wife and two children. He describes his new community as warm and welcoming. He bought a house, and his family became fast friends with their next-door neighbors from Lebanon. His kids quickly adapted to a familiar school system after their time in the US

“We like it here,” Mr. Naqi said. “Much better than in the US”