IT unemployment rises as AI reshapes jobs

The unemployment rate in the information technology (IT) sector jumped from 3.9% in December to 5.7% in January, surpassing the overall jobless rate of 4%.

The number of unemployed IT workers rose from 98,000 to 152,000, according to Janco Associates’ report analyzing Labor Department data.

Job losses in tech are linked to automation and AI adoption. Several routine IT roles, such as reporting and clerical administration, are being replaced by AI. 

Some companies are also cutting programmers and systems designers, expecting AI to improve efficiency and reduce costs.

While job cuts continue, some firms are still hiring. Cloud security firm Netskope is adding data engineers and cloud operations specialists. However, budget cuts planned last year have led to layoffs, including 5% of Meta’s workforce and 8.5% at Workday.

Indeed saw an 8.5% decline in software job postings this January compared to last year, but hiring in tech may stabilize after last year’s deep cuts, says the platform’s economist Cory Stahle.