IT unemployment hits new high as AI threat continues

• Tech sector layoffs rose from 98,000 (3.9%) to 152,000 (5.7%) in just one month
• Software development and white-collar jobs could be most at-risk
• In-person and skilled roles remain competitive

New Wall Street Journal reporting has revealed an alarming trend within the tech sector – much like sceptics anticipated years ago, artificial intelligence looks to be displacing human workers and leading to higher unemployment rates.

The report found IT sector unemployment rates rose from 3.9% in December to 5.7% in January, or from 98,000 to 152,000 Janco Associates analysis of the US Department of Labor data.

More broadly, 143,000 new jobs were added in January 2025 to the US economy, albeit at a slower rate than optimal.

AI is costing IT jobs

In fact, white-collar and knowledge workers are seen as the most at-risk when it comes to AI-induced job displacement. Jaco Associates CEO Victor Janulaitis commented: “Jobs are being eliminated within the IT function which are routine and mundane, such as reporting, clerical administration.”

Companies are also reducing their reliance on programmers and system designers in the hope that artificial intelligence can deliver further cost savings. The number of software development job posts dropped 8.5% year-over-year in January 2025.

Although last year's pattern was considerably lower than 2023, when layoffs.fyi tracked 264,000 tech sector redundancies, as estimated 152,000 tech workers still lost their jobs in 2024 – nearly as many as the 165,000 workers who lost their jobs in 2022.

Recent notable job losses include Sonos (12% of its headcount), Meta (5%), Microsoft, Amazon and Google.

The report also suggests that further corporate investment in artificial intelligence could serve as an early sign that future job cuts could come – a trend described as “cost avoidance.”

However, while certain jobs may be at risk, others remain in high demand. The report reveals that certain in-person and skilled roles are in greater demand than many white-collar positions – the 'in-person' element of that trend is particularly interesting, given the widespread return-to-office mandates that have been enacted post-pandemic.

It's not all bad news though – Janulaitis revealed that January’s figures, which paint a negative picture for the year ahead, could indeed be artificially inflated by many companies who are looking to implement this year’s cost-cutting measures now, rather than later.

Regardless, with a further 10,800 job cuts actioned in the first five weeks of 2025 across the industry, many workers are faced with an uncertain future.

You might also like

• Worried about the news? Check out the best job sites and best recruitment platforms
• Prepare for changes with the best online learning platforms
• White-collar jobs are increasingly being exposed to AI