The job market for IT workers remains uncertain as tech companies continue to lay off staff
The unemployment rate in the information technology labor market rose to 3.8% in April from 3.6% in March, reflecting ongoing uncertainty in the tech sector as AI continues to wreak havoc on hiring.
That is according to an analysis by the consulting firm Janco Associates, which bases its findings on data from the U.S. Department of Labor.
But the information sector lost 13,000 jobs in April. Although it is still too early to say exactly how AI is affecting employment overall, some companies—especially in the tech sector—have stated that it is part of the reason they are cutting staff.
In April, Meta Platforms announced that it would lay off 10% of its workforce—approximately 8,000 people—as it seeks to streamline operations and fund its massive investments in AI. Nike will reduce its workforce by approximately 1,400 employees, or about 2%, primarily in its technology department, as it streamlines global operations. And Snap plans to cut 16% of its workforce, or about 1,000 jobs, with the aim of increasing efficiency.
In other IT sectors, including telecommunications and data processing, employment has fallen by 11%, or 342,000 jobs, since its last peak in November 2022.
But AI isn’t the only culprit. Inflation and economic uncertainty linked to the conflict in Iran are prompting some CEOs and tech leaders to scale back or pause their IT hiring, said Janco CEO Victor Janulaitis.
And while AI skills are generally in high demand, there are also some employers who are unwilling to pay the high salaries required to attract such workers, Janulaitis added. “Why should they hire an AI specialist for something that might not deliver results?” he said.
There are also signs that hiring for other tech jobs, particularly in software engineering, is not slowing down. Job postings for developers have increased by 15% year-over-year on the job search platform Indeed, according to Hannah Calhoon, its vice president of AI.
However, when it comes to job openings for software developers, «many people are looking to hire engineers who already have experience,» Calhoon said. That’s a worrying sign for candidates early in their careers—especially in software—who are increasingly finding that AI is limiting their job prospects.
Manu Narayan, GitLab’s chief information officer, said that the software development tools provider will see changes in its entry-level IT roles. Over the next 12 to 18 months, those help desk positions will likely be replaced by AI agents, but workers early in their careers still have the opportunity to develop those AI agents and workflows, he said.
«We see that hiring practices are changing in terms of some of these skills and backgrounds, but at the same time, we don’t see that this eliminates the need for exceptional individuals with strong critical thinking skills,» Narayan said.
At the same time, some major tech companies have made public commitments to hire more college graduates. International Business Machines CEO Arvind Krishna told The Wall Street Journal in March that the company would hire nearly twice as many college graduates this year compared to last year.
«Will there be any changes in the nature of work? It would certainly be absurd to argue that there won’t be,» Krishna said. «That said, all these technologies are going to make us more productive.»
