CHAUDHRI: Layoffs in the tech industry create a market of employers

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Canada’s labor shortage is a relic of the pandemic past.

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Over the past few weeks, a host of blue-chip tech companies and start-ups have downsized in the wake of a looming recession.

Amazon recently announced that it has reduced its workforce by 100,000 this year.

On July 26, e-commerce giant Shopify laid off 10% of its workforce, adding around 1,000 workers to unemployment.

Clearco announced the dismissal of 25% of its workforce (125 employees); Wealthsimple laid off 159 employees in June; Carvana Co, an online car dealership, laid off 2,500 employees in May; and cryptocurrency exchange company Coinbase announced the layoff of 18% of staff, representing nearly 1,000 employees.

This list is just a sample of the terminations we are seeing in the industry this year.

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Of particular note is the softer terminology that companies and the media are using to describe these layoffs. The terms “downsizing”, “shrinking” and “laying off” all mean the same thing. These employees are permanently terminated and, in some cases, may be entitled to substantial damages for wrongful dismissal, particularly if employed in Canada.

As employers announce layoffs in the media, many use their press releases to share details of employee severance packages, and in some cases go so far as to call them “generous”. Companies may claim that for PR and other reasons, but that doesn’t make it so. Terminated employees should do their own due diligence when terminated to determine their respective rights and entitlements in the event of termination.

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Group dismissals can be mind-blowing. Employees may feel greater pressure to give in and not contest their redundancy offers, to let go and move on for the greater good of the company; empathize with their former colleagues and seek greener pastures. Don’t fall into the trap.

Employees should take stock of their own careers and futures, especially given the bleak prospects for re-employment in some industries. There are thousands of employees looking for jobs now. The employer will have his choice. The competition will be fierce. Add to that, the cancellations will continue.

If you have been released from the tech industry, here are some compensation and benefits items you may be entitled to:

SALARY – Your termination letter may proclaim that it is generous, but it is prudent to consider how long it will take you to find a similar job and compare that to the salary offer, often referred to as the notice period.

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PRIME — If you worked to earn a bonus but were terminated before payout day, you may still be entitled to a prorated portion of the bonus you worked for. Additionally, you may be entitled to your lost bonus winnings during the notice period.

STOCK OPTIONS — If options were granted to you when you were hired or during your employment, you may be entitled to acquire these options, even in the event of termination of employment. If you think these options could be in the money soon, exercising your options could be a great boon.

LONG/SHORT TERM INCENTIVE PLANS AND VESTED AND UNVESTED RSU — If you earn variable compensation through LTIP or STIP, you may be eligible to vest in those plans even after termination. You may also be entitled to any STIP/RILT that you would have earned during the notice period.

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HEALTH BENEFITS — Often, employees can continue to receive medical and dental benefits even after termination of employment.

Even if your employer does not offer you these termination benefits or payments, you may still be entitled to them. Before signing a severance package, be sure to research all possible upgrades to weather the storm of recession.

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On to this week’s questions:

Q. During the pandemic, I was able to work from home. I suffered from alcohol addiction. As a result, I confess that I missed some critical moments at work, including meetings and sometimes missed deadlines. I also missed a fairly important one-on-one with my supervisor. I am fortunately on the road to recovery, but I know that I am not in a positive position at work. I know for sure that my boss is upset with my performance. I’m taking advice and seeing my doctor and I’m afraid of losing my job. Any opinions will be welcome?

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A. Addictions are recognized disabilities under the Human Rights Code. If you are seeking medical treatment for an alcohol addiction or addiction, you are likely entitled to an accommodation at your workplace because of your disability. You may consider accessing short-term disability benefits and/or provide a medical note to your human resources department regarding any restrictions or accommodations you may need while your disability is being addressed. If you do not provide any medical information to your employer, you risk compromising your role. Employees are required to participate in the accommodation process and it starts with you working with your medical team to provide your employer with at least some general information about the medical accommodation you may need while you seek treatment.

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Q. I work in an HR team and we had to restructure many of our departments, which led to mass layoffs in our company. Without going into details, some employees upon their termination raised complaints that they had never before brought to HR during their employment. Is HR required to investigate employee complaints after termination?

A. It is always good practice to investigate complaints, especially if they relate to current employees. If a complaint has not been filed with HR, it is important to determine the reason. If there is an internal barrier where employees feel they cannot complain to HR, this needs to be addressed. An investigation can also be useful in the event of a dispute. It is important to seek legal advice regarding any investigation that may be launched, especially if the allegations are of a sensitive nature.

Do you have a problem at work? Maybe I can help!

Email me at and your question may be featured in a future column.

The content of this article is for general information only and does not constitute legal advice.

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