AI on the Horizon: August 21, 2025

Is AI helping or hurting job seekers?

Canada’s latest AI news on the economy, society, and policy. This week, we look at AI’s implications for workers and small businesses. The rise of AI agents is nigh. Hopefully, an AI agent won’t replace us before the next issue.

Layoffs at Indeed and Glassdoor hiring firms incoming

Indeed and Glassdoor announced 1,300 combined layoffs, pointing to changing labour dynamics and a desire to develop an AI-first operational strategy. Layoffs will affect R&D, Tech, HR, and sustainability divisions the most. For many workers, this is another reminder that AI’s reach extends far beyond tech circles and into the platforms that connect people to work. Whether this change comes from a desire to remain competitive (Microsoft also announced layoffs in a similar tone) or is part of a broader shift in the labour market, expect to see similar announcements as AI agents evolve and become cost-effective to deploy at scale. Consequently, Canada’s labour market growth is fading, as the business sector declined in July 2025, the first drop since January.   

Consulting firms are re-tooling for an AI future

Rapid expansion during the GenAI era is changing internal consulting processes and the demand for sector-specific expertise among large consulting firms. In Canada, the government has promised to become less reliant on external consulting work, with the potential to create a substantial gap in future revenue for consulting firms.  Since the cost of information gathering is lower due to rapid GenAI adoption across knowledge sectors, consulting firms need to offer added value beyond standard delivery models. As a result, GenAI consulting positions are growing in 2025.  Our research suggests that the ability to use and understand AI is gaining traction among job postings across Canada.

AI for business growth: opportunity amid job market shifts

While online platforms like Indeed and Glassdoor are cutting staff to streamline operations with AI, domestic innovators think local businesses could see considerable benefits from ‘small business-ready’ AI services in Canada.

Instead of focusing on replacing workers with AI, entrepreneurs are targeting small businesses that lack the resources for IT departments or software development. Saskatoon-based Vendasta is deploying autonomous AI agents to help small and medium-sized businesses manage sales, marketing, and operations more efficiently, promising enterprise-grade automation without the enterprise price tag. Meanwhile, Toronto-based Ceedar is automating Canadian-compliant bookkeeping for small business owners. Their product is so valuable that customers are vying to become investors- blending AI-native entrepreneurship with community-funded growth. If you can’t beat AI, sell it.

On the horizon

For Canada’s economy, this shift underscores a core reality of the current AI ecosystem: while some tasks and services are being replaced, new opportunities are emerging in AI entrepreneurship, particularly in sectors where AI can augment human expertise.

Our research suggests that nearly half of our start-up ecosystem is already using GenAI, with a majority of the firms reporting no plans to reduce headcount.

While we are in the early days of AI’s impact on the job market, our forthcoming Future-Skills-Centre (FSC) research should shed light on the issue. Stay tuned for more.