The Fredericton cybersecurity community has been shaken this summer by more than 100 layoffs at IBM, though officials in the sector believe it is strong enough to withstand the blow.

The Fredericton Gleaner first reported earlier this month that IBM was cutting an unspecified number of positions, and that the cuts came just months after the blue chip IT company announced it would create up to 250 new jobs in the provincial capital.

Several people familiar with the situation told Entrevestor that IBM has given layoff notices to between 106 and 108 employees in the cybersecurity R&D operation in Fredericton.

“A small number of roles have been eliminated,” said IBM spokesperson Lorraine Baldwin in an email, providing the same statement that she gave the Gleaner. “IBM continually evaluates the evolving needs of our customers to match our skills and expertise with the requirements of our clients, partners and our growth strategy, and we continue to grow our business in New Brunswick.”

Those operations grew out of IBM’s acquisition in 2012 of Q1 Labs, which was reported to be worth more than $600 million. After IBM bought Q1 Labs, it headquartered its global cybersecurity research and development in Fredericton, placing former Q1 CTO Sandy Bird in charge of a network of cybersecurity labs located around the world. The Fredericton workforce in this operation at one point numbered about 200 people.

In the past decade, the cybersecurity community in New Brunswick has grown, and has even become a key economic plank in the provincial government’s economic development plans. The Canadian Institute for Cybersecurity opened in 2017, and the Cyber Centre, an office complex custom built for cybersecurity organizations, came along four years later. As well as IBM, the German engineering firm Siemens has a cybersecurity outfit in Fredericton. And in April, Thales North America, a division of the French defense and technology company, said it would establish a new National Digital Excellence Centre in the Cyber Centre.

Meanwhile, Fredericton is home to such cybersecurity companies as Sonrai Security (co-founded by Bird and fellow IBM veteran Brendan Hannigan), Bulletproof Solutions, Beauceron Security and Gray Wolf Analytics. Down the road in Saint John, Troj.ai has been growing.

While business people within the cybersecurity cluster in Fredericton said the IBM downsizing was bad news, they also said the community is resilient enough to overcome it. And the freeing up of so much talent could benefit other companies.

“Ultimately, this is a sign of a maturing ecosystem for cybersecurity and digital innovation,” said Cathy Simpson, CEO of the IT association TechImpact. “We have many companies coming to New Brunswick, as well as start-up companies emerging each year.   We should expect some transitions over time across the ecosystem, as it expands and matures.”

TechImpact, and the New Brunswick Cybersecurity Ecosystem working group headed by University of New Brunswick President Paul Mazerolle, have been working to find the laid off people positions within the province. There is strong demand from cybersecurity companies, and Simpson said other companies, many within traditional industries, are looking for the skillsets they offer.

One cyber employer, who asked not to be identified, said he originally believed that the employees being laid off would be IBM’s most recent hires. However, he learned that the people now looking for work include programmers with various levels of experience. That made him more interested in hiring some of them as he is looking for experienced programmers for his business.

“We are of course losing a good number of jobs, and good-paying jobs, and [some companies] might see it as an opportunity to hire good people,” said Ali Ghorbani, the Director of the Institute for Cybersecurity. “But we may not have the capacity to hire all these people and we may lose them to other jurisdictions. That to me is more concerning.”

Some people mentioned that IBM is still hiring in Fredericton, just not in cybersecuroty. The company said in December it would open its IBM Client Innovation Centre in the city, with plans to create up to 250 new jobs in New Brunswick. Opportunities New Brunswick, the provincial government’s economic development agency, pledged to pay up to $4.8 million in payroll rebates for the project.

So the company will be hiring people for its Client Innovation Centre even as it lays people off in cybersecurity. Though the people who spoke to Entrevestor said the cybersecurity community could overcome the IBM downsizing, some said the community has to take steps to make sure other companies don’t leave.

Ghorbani, for example said he is worried it could become part of a trend. “Industry, governments and academics have to get together and analyze the situation . . .  and be proactive and not only do things afterward,” he said. “We have to maybe have conversations with other companies to see what we can do from the business perspective to see if there are things we should be doing.”