Washington: The increasing use of artificial intelligence (AI) has continued to have negative impact on the information technology (IT) job market in the US, with unemployment rates increasing in this vital sector.
According to the US newspaper the Wall Street Journal (WSJ), the unemployment rate in the IT sector in the US rose from 3.9% in December 2024 to 5.7% in January 2025, as a result of the increasing reliance on automation and the use of AI technologies, pointing out that the number of unemployed IT workers rose from 98,000 in December 2024 to 152,000 in January 2025.
According to economic experts, labor market data, and specialized reports, job losses in the technology sector can be attributed in part to the impact of AI, as the emergence of generative AI has led to huge amounts of spending by giant technology companies on AI infrastructure instead of new jobs in the IT field, the newspaper added.
The WSJ said that "jobs are being eliminated within the IT function which are routine and mundane, such as reporting, clerical administration."
"As they start looking at AI, theyre 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," the WSJ added, indicating that companies are betting that AI will bring economic benefits to companies, whether in terms of improving efficiency or reducing costs.
"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," WSJ said.
According to experts, the latest IT jobs numbers come as unemployment among white-collar workers remains at its highest levels since 2020.
"What weve 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," WSJ added.
Experts said that new 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.
Another reason for Januarys tech job losses was that companies began implementing some intended spending cuts for this year, and many slashed budgets based on what the economy looked like during fiscal planning last year, reports showed, adding that layoffs have also continued at some large tech companies.
In January, Meta Platforms said it would cut 5% of its workforce in performance-based job cuts in the US, and enterprise software giant Workday said it would cut about 8.5% of its workforce, reports indicated.
