The rapid expansion of artificial intelligence (AI) reshapes the technology labor market, resulting in an increase in unemployment among information technology workers (TI).
According to WSJ, the latest report by the consulting firm Janco Associates, based on data from the US Ministry of Labor, reveals a strong increase in computer unemployment of 3.9% in December to 5.7% in January, well above overall unemployment rate of 4%.
The number of unemployed IT professionals increased from 98,000 in December to 152,000 in January, stressing how AI AIA and transformations affect the workforce. This happens at a time when the wider American labor market remains resilient but slowing down, the economy adding 143,000 jobs last month, a lower pace compared to the previous two months.
Register For TEKEDIA Mini-MBA Edition 16 (February 10 – May 3, 2025)) Today for early reductions.
Tekedia Ai in Masterclass Business open registration.
Join Tekedia Capital Syndicate and co-INivest in large world startups.
Register become a better CEO or director with CEO program and director of Tekedia.
The increase in computer unemployment is partly motivated by the growing adoption of automation fueled by AI, which eliminates traditional roles within the industry. Many jobs that involve routine tasks – such as reports, office administration and even software development – are rationalized or downright replaced by AI, which reduces the need for human employees.
“Jobs are eliminated in the computer function which are routine and banal, such as reports, office administration,” said Victor Janulaitis, CEO of Janco Associates. “While they are starting to look at AI, they also plan to reduce the number of programmers, systems designers, hoping that AI will be able to provide them with a certain value and have a good rate of yield.”
Technological companies, in particular the great giants of technology such as Amazon, Microsoft, Meta and Alphabet, spend billions of dollars in infrastructure led by AI, but this investment has not yet been translated by increased hiring for IT workers. Instead, cost reduction measures are being priority, and many companies rely on “cost avoidance” led by AI – a strategy where automation takes care of tasks traditionally carried out by Humans, eliminating the need to extend the IT teams.
The technological job losses of January have also been aggravated by the budget cuts of companies, while companies began to implement cost reduction strategies planned during the budgetary cycle of last year. Some of these reductions were based on economic uncertainty of 2023, which led companies to adjust their expenses in anticipation of a difficult commercial environment in 2024.
Among the notable layoffs: META announced that it would reduce 5% of its workforce thanks to dismissals based on performance in the US Workday, a large supplier of corporate software, said that it would reduce 8.5% of its workforce as part of a broader restructuring effort.
However, there are still areas within technology that continue to see the job activity. The Netskope Cloud Security Company, for example, extends its workforce in areas such as data engineering, data analysis and cloud operations. Mike Anderson, digital director and information manager of Netkope, noted that his company “makes investments to stimulate productivity through the company”.
Unemployment of white collars at its highest level since 2020
Beyond the IT sector, job losses in white collar become a wider trend. According to Cory Stahle, an economist on the hiring site, in fact, job offers for knowledge-based positions have stagnated, while the demand for qualified labor roles in person remains high.
“What we have really seen, especially in the past year, is a bifurcation of opportunities, where jobs such as workers in white collar have had much less employer request than jobs more in person And qualified work jobs, “says Stahle.
New job offers for the roles of software development on indeed decreased by 8.5% in January compared to a year earlier. However, Stahle stressed that the trend can stabilize after drastic layoffs in the technological sector of 2023.
The future of IT employed in an AI -focused economy
The current AI automation wave presents both opportunities and risks for the computer labor market. Although IA investments lead to unprecedented growth in certain areas, they also eliminate jobs at a rapid pace. The current trend suggests that companies will continue to prioritize automation in relation to the expansion of the workforce, in particular in the roles where AI can effectively replace human workforce.
However, emerging areas within AI and cybersecurity could offer new employment opportunities to displaced workers. Companies that invest in AI infrastructure, cloud security and data engineering will require qualified professionals to manage, train and supervise these systems.
Despite these possibilities, the immediate impact of the AI on employment is more displacement than the creation of jobs, which raises concerns concerning long -term employment of employment in the technology industry.
