IT unemployment on the rise: Is AI to be blamed?

The IT unemployment rate has now climbed to 5.7%.

The tech labor market is experiencing a higher-than-average unemployment rate, with many pointing to artificial intelligence (AI) as a key factor.

A recent Janco Associates analysis of U.S. Department of Labor data revealed a sharp increase in unemployed IT workers:

📈 December 2024: 98,000 unemployed tech workers

📈 January 2025: 152,000 unemployed tech workers

📉 Tech unemployment rate: 3.9% → 5.7%, surpassing the 4% average across all industries

AI Reshaping the Tech Workforce

Victor Janulaitis, CEO of Janco Associates, attributes this rising joblessness to the rapid growth of AI.

While tech giants like Meta and Microsoft invest billions in AI infrastructure, they are not equally investing in IT jobs.

Instead, many companies are using AI to automate routine roles, including:

✔ Clerical administration

✔ Report generation

✔ Basic programming and system design

Janulaitis explains that companies expect AI to replace human roles, reducing hiring efforts in the IT sector.

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Declining Job Postings in Software Development

Further supporting this trend, Indeed economist Cory Stahle reports:

📉 New software development job postings dropped 8.5% in January 2025 compared to last year.

As companies bet on AI-driven efficiencies, the demand for traditional IT roles is declining, leaving many tech workers searching for opportunities in an evolving job market.