Cost-cutting is main driver for recent wave of layoffs

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July 2023

According to the latest study conducted by Capterra, cost-cutting is the most cited reason for layoffs in Canada. The recent wave of layoffs caused Canada’s unemployment rate to rise amid inflation. Capterra surveyed over one thousand Canadian employees of small and medium-sized enterprises to gather data on the reasons for layoffs, offboarding strategies, and upskilling tactics. Based on the survey, the main drivers for layoffs include cost-cutting, a decrease in operations and company funds, outsourcing, and mergers.

Based on the study, 37% of participants indicated that their organization provides support to laid-off employees:

  • A reference letter (62%)
  • Help finding a new job (41%)
  • A redundancy package (37%)
  • Subscriptions for professional development courses (11%)

With 26% of organizations deploying offboarding strategies, which include preparing paperwork and arrangements for knowledge transfer, and 65% of these organizations conducting exit interviews. Yet, 45% of employees reported that their organization does not have a strategy to handle employee departures. Conversely, in order to retain employees and close talent gaps employers are investing in upskilling, with 41% of employees indicating that they participated in upskilling in the past six months. To learn more about the Capterra study, click here.

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