US IT job market shrinks as AI and recession fears take toll

The IT job market in the US is under severe pressure, with unemployment rates spiking due to economic uncertainty and the rapid adoption of AI automation. According to the latest Bureau of Labor Statistics data, the unemployment rate for IT professionals jumped from 4.6% in April to 5.5% in May—marking the fifth consecutive month where IT unemployment exceeded the national average.

Key Findings:

• AI is replacing entry-level jobs: Janco's report highlights that most job losses are in telecom, compliance reporting, and support roles, with AI automating these tasks.
• Limited opportunities: Open positions are primarily in AI-related fields like large language models, blockchain, and omnichannel commerce.
• Regional disparities: Smaller markets (e.g., Nashville, Tulsa) are harder hit than tech hubs like New York and Dallas.

The Rise of Agentic AI

• Agents—AI applications designed for autonomous decision-making—are becoming a focal point for businesses seeking ROI on AI investments. A recent EY survey found that 48% of business leaders are already adopting agentic AI, with 92% planning to increase AI spending.
• Workforce impact: While AI management roles are growing, EY admits a "rebalancing of the workforce" is underway, with CompTIA noting a 117% surge in AI-related job postings.

Outlook

Janco predicts continued IT job shrinkage in 2025, driven by economic instability and AI-driven efficiency gains. As Victor Janulaitis, Janco CEO, bluntly put it: "Companies are focusing on AI to automate compliance and reporting tasks, not hiring new staff."

Related Stories:

• Workday cuts 8.5% of workforce due to AI
• Anthropic CEO warns of 20% unemployment from AI

In short, the message to IT professionals is clear: adapt to AI or risk obsolescence.