Technology

Tech companies reflect on their agenda

Several companies in the technology sector, such as Shopify, have laid off several employees after changing economic trends. (Photo: Canadian Press)

Toronto. The volatility in the technology sector is forcing companies to think about employee incentive programs.

For example, Ottawa-based Shopify’s stock price has lost about 80% of its value after hitting a high of $222.87 at the end of 2021.

“If you’re in your early twenties and have never worked in a start-up business, you should have thought you could afford a cottage, but things went downhill after a few months… It can be pretty overwhelming,” notes Chris Albinson, CEO Communitech.

The reversal of global trends dampened the enthusiasm of investors.

Several companies in the technology sector, such as Shopify, Netflix, Wealthsimple and Clearco, have responded by laying off several employees and have warned their employees that these new savings are intended to reduce the impact of a possible recession.

This transition must have turned the heads of many workers accustomed to dreamy conditions.

“A year ago, someone could be recruited by offering a low base salary and a large amount of company stock. I don’t think that’s the case today,” said Natalie Romero, who worked at Shopify for four years before being laid off in July along with 1,000 colleagues.

“Stocks are no longer as attractive as they used to be,” she adds.

Shopify seems to have figured this out. Its “new reward system,” giving employees a choice of cash or stock, will go into effect September 1, company spokeswoman Jackie Warren said.

Other companies may well follow suit.

Think Research has been considering changing its share placement policy for over a year now. Sachin Aggarwal, its chief executive, believes that this will allow the company to “better protect its place in the market.”

Big names like Google and Amazon have such a global footprint that they can offer higher wages to hire or retain employees. This liquidity is not necessarily the preserve of smaller companies like Think Research, which must bet on their stock to attract talented workers.

And when the market fluctuates, the offer is no longer so convincing.

“When the share price rises, our perception of your market value improves. And when your share goes down, perception also goes down among qualified employees,” says Aggarwal.

And some players have probably regretted their investments in technology companies. Thus, Power Corporation acquired a 24% stake in Wealthsimple. The value of this package in March was $925 million. Today it has decreased to 492 million dollars.

“Some people invest in companies in the consolidation phase, as if they were growing at the same pace as they started. That may not have been realistic in retrospect, says Nick Beike, founder of Helcim. We are currently experiencing a period of contraction and revaluation. It forces companies to think about their action programs and examine their performance.”

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