The tech labor market is facing rising unemployment, with a notable increase from 98,000 to 152,000 unemployed IT workers from December 2024 to January 2025. This translates to a rise in the unemployment rate for tech workers from 3.9% to 5.7%, exceeding the average for other industries. Janco Associates attributes this trend to advancements in artificial intelligence, as tech companies prioritize AI investment over new IT job creation. Job postings in software development also fell by 8.5% year-over-year as reliance on AI grows.
Jobs are being eliminated within the IT function which are routine and mundane, such as reporting, clerical administration.
As tech companies hope that AI will replace jobs and provide a good return on investment, they are decreasing their hiring efforts.
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