Vancouver-based tech startup Klue has cut over 40% of its workforce—about 85 employees—as it pivots to becoming “AI-first” amid rising competition from internal and external AI tools The layoffs, implemented on June 25, were part of a wider restructuring aimed at improving cost-efficiency and accelerating its path to profitability by integrating more AI into operations.

CEO Jason Smith explained that blurred lines between paid solutions and free AI tools like ChatGPT have created ambiguity in customer willingness to pay. Klue has also been losing deals to DIY AI initiatives, motivating the cuts and consolidation of engineering resources. Remaining staff will focus on building narrower, more specialized AI products to ensure differentiation from generic large-language models.

For Canada’s tech job market, Klue’s layoffs underscore the rapid transformation underway. Even well-funded startups (Klue raised over $100 million CAD) are shedding talent to survive in an increasingly AI-driven environment. This reinforces a growing trend in Canadian tech: workers must stay agile, continuously build AI-relevant skills, and be ready for frequent shifts in company strategies or workforce structures.

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Josh Scott’s original article, “Klue lays off 40 percent of staff as startup faces internal and external AI pressure ” was published in BetaKit News on June 27, 2025. Read the Full BetaKit News story.