And very soon it will be climbing higher. . .
https://www.wsj.com/articles/it-unemployment-rises-to-5-7-as-ai-hits-tech-jobs-7726bb1b
Artificial intelligence continues to impact the technology labor market
By: Belle Lin
Feb. 7, 2025 7:08 pm ET
The unemployment rate in the information technology sector rose from 3.9% in December to 5.7% in January, well above last month’s overall jobless rate of 4%, in the latest sign of how automation and the increasing use of artificial intelligence are having a negative impact on the tech labor market.
The number of unemployed IT workers rose from 98,000 in December to 152,000 last month, according to a report from consulting firm Janco Associates based on data from the U.S. Department of Labor.
The department on Friday said the economy added 143,000 jobs, as the job market continued to chug along, though at a slower pace than in the prior two months.
Job losses in tech can be attributed in part to the influence of AI, according to Victor Janulaitis, chief executive of Janco Associates. The emergence of generative AI has produced massive amounts of spending by tech giants on AI infrastructure, but not necessarily new jobs in IT.
“Jobs are being eliminated within the IT function which are routine and mundane, such as reporting, clerical administration,” Janulaitis said. “As they start looking at AI, they’re also looking at reducing the number of programmers, systems designers, hoping that AI is going to be able to provide them some value and have a good rate of return.”
Increased corporate investment in AI has shown early signs of leading to future cuts in hiring, a concept some tech leaders are starting to call “cost avoidance.” Rather than hiring new workers for tasks that can be more easily automated, some businesses are letting AI take on that work—and reaping potential savings.
The latest IT jobs numbers come as unemployment among white-collar workers remains at its highest levels since 2020, according to Cory Stahle, an economist at hiring website Indeed.
“What we’ve really seen, especially in the last year or so, is a bifurcation in opportunities, where white-collar knowledge worker type jobs have had far less employer demand than jobs that are more in-person, skilled labor jobs,” Stahle said.
New Indeed job postings in software development, for instance, declined 8.5% in January from a year earlier, but they are showing signs of stabilizing after drastic job cuts in the tech sector in 2023, Stahle added.
In Santa Clara, Calif., Netskope is hiring for several technical roles, including data engineers, data analytics and cloud operations engineers, said Mike Anderson, the cloud security company’s chief digital and information officer.
Forming new product teams in IT required additional hires, and Netskope is “making investments to drive productivity across the business,” Anderson said.
Another reason for January’s tech job losses was that companies began implementing some intended spending cuts for this year, Janulaitis said, and many slashed budgets based on what the economy looked like during fiscal planning last year.
Layoffs have also continued at some large tech companies. Last month, Meta Platforms said it would cut 5% of its workforce in performance-based job cuts in the U.S., and on Wednesday enterprise software giant Workday said it would cut about 8.5% of its workforce.