With the ongoing economic downturn impacting tech companies large and small, layoffs have now reached the innovation hubs designed to support them.
Kitchener-Waterloo tech hub Communitech announced today that it has laid off approximately 10 percent of its workforce.
In a LinkedIn post, Communitech said that the staff reductions were made earlier this week as it joins a tech ecosystem facing “challenging economic conditions.” Communitech’s statement noted that public relations, human resources, digital marketing, and program coordination divisions, among others, were affected.
Director of strategic communications Candace Beres confirmed to BetaKit that 11 employees were let go, with the current Communitech team now a staff of 89 employees. She added it was an organization-wide reduction and that no whole teams were impacted, though its marketing and human resources divisions were affected the most.
Communitech noted its commercial real estate offering has experienced challenges that the hub expects to continue into next year.
“Like many in the Canadian tech ecosystem, Communitech has not been immune to the conditions of the macro environment that we operate in,” said Chris Albinson, CEO of Communitech, in a statement to BetaKit. “We’re saddened to have had to say goodbye to 11 incredibly talented and valued Communitechers as we realign our resources in order to continue serving founders in a difficult economic climate.”
Communitech does have 195 employees listed on LinkedIn, however, and data from LinkedIn indicates that Communitech’s workforce, at one point, reached 387 last year. Beres attributed last year’s decline in employees to contracted workers for the Digital Main Street program ending their term, noting that Communitech has typically hovered around 100 “proper” staff with any additional roles listed on the social network likely to be local mentors or growth coaches.
Beres noted that Communitech’s commercial real estate offering has experienced challenges that the hub expects to continue into next year. Because of this and other economic factors, we had to be realistic about the environment that we are in and expect to be in for the next few months.
The last time Communitech faced similar staff reductions was in 2019, following a 30 percent cut in funding from the province. At the time, the hub shrank from 105 to 90 employees.
Founded in 1997, Communitech has been a long-time champion for Kitchener-Waterloo’s tech ecosystem. It has seen many iterations since its establishment, and claims to have worked with close to 1,000 companies, including the likes of Faire, ApplyBoard, and D2L. In 2021, Communitech-associated companies raised a collective $2.7 billion—a clear indication of how much has changed in a year’s time.
Another indication of changing times might be found in the hub’s aspirations to also deploy venture capital. Last November, BetaKit was first to report that Communitech was exploring a $200 million venture fund to support startups across the country as part of its True North Strategy. Sources with knowledge of the matter indicated that the fund had planned a final close before the end of the year.
Since that time, capital has dried up, with several funds struggling to raise new funds. Communitech told BetaKit that it is still pursuing True North Fund I and expects to have an update to share in the spring.
In its layoff announcement, Communitech included a link to The Help List, a pre-vetted list of displaced tech talent that Communitech itself re-launched in August this year in response to ongoing workforce reductions in the tech sector.
Disclosure: In September of this year, Communitech acquired Canadian startup data platform Briefed.in. BetaKit receives data from briefed.in as part of a media partnership with Communitech and retains full editorial control of all articles that reference the data produced by briefed.in/Communitech.
Update (11/25/22): this article has been updated with additional commentary from Communitech.