America's IT Unemployment Rises To 5.7%. Is AI Hitting Tech Jobs? (msn.com) 73
The unemployment rate in America's information technology sector "rose from 3.9% in December to 5.7% in January," reports the Wall Street Journal. (Alternate URL here.) Meanwhile last month's overall jobless rate was just 4%, they point out, calling it "the latest sign of how automation and the increasing use of artificial intelligence are having a negative impact on the tech labor market."
Companies began implementing their annual spending cuts in January, and there were layoffs at large tech companies like Meta. But whatever the reason, "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," while the Labor Department said the overall economy added 143,000 jobs.
One management consulting firm offers this explanation: 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.
Stahle notes that job postings at Indeed.com for software developers declined 8.5% in January from a year earlier...
Companies began implementing their annual spending cuts in January, and there were layoffs at large tech companies like Meta. But whatever the reason, "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," while the Labor Department said the overall economy added 143,000 jobs.
One management consulting firm offers this explanation: 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.
Stahle notes that job postings at Indeed.com for software developers declined 8.5% in January from a year earlier...
Hundreds of resumes and applications (Score:2, Insightful)
over the past 3 years. Not a single interview. It's fuckin' weird. Twenty years in the industry. I've had recruiters, headhunters, etc, all look at my resume and tell me that they can't find any problem with it or red flags, it just seems like the industry is filled with former FAANG (or whatever the current acronym is) to fill the jobs that are posted.
Why would anyone hire a third-string programmer? (Score:2)
Like AC?
Writing as a second-tier programmer in my best days, though several of my projects did live long after me. But I worked with and for a number of first-tier programmers and they rarely failed to amaze me with their insights and code productivity. (Metric of my age that at least two of them have already passed away?) I loved the differences, but eventually I concluded I was never going to get to that tier and I moved on to other stuff. (And got more money? Go figure... Must be that Ricardo guy again.)
That's not what AI gives you though (Score:5, Interesting)
why would any employer want second-rate code from an in-house programmer when they can cheaply copy the first-rate stuff?
I've been a professional programmer for decades and have been trying to work AI into my workflow for a while now.
The thing is almost every time I ask AI to do something, what I get is not that first rate stuff you are talking about. It's often stuff that is incomplete or doesn't even work at all without modification. And yes, coding is not at all immune from hallucination as it will also simply make up whole Frameworks to link to, that do not even exist!
So what companies will get that mostly use AI is a lot of second rate stuff, that I am highly dubious will fare well in maintenance and changing over time.
Maybe sometime it will improve but it seems like a bad idea to plan for that being inevitable when we are not really close yet to any kind of really remarkable level of ability.
If you know how LLM's work you can see where there might be a wall of ability an LLM simply cannot climb beyond.
Re: That's not what AI gives you though (Score:2)
Re:Hundreds of resumes and applications (Score:5, Interesting)
Everyone is hiring and yet no one is hiring. Job listings stay up for months on end I'm pretty sure a number of them are just to collect personal information for scammers.
Re: (Score:2)
Everyone is hiring and yet no one is hiring. Job listings stay up for months on end I'm pretty sure a number of them are just to collect personal information for scammers.
Well you could try getting an english literature degree, land a job as a prompt engineer and start writing complex software in plain English but even that won't last beyond the 31st of December 2030 when all work will end so you might as well just apply for your UBI right now and decide which Soylent Green factory your corpse will be going.
Re: (Score:2)
Well you could try getting an english literature degree, land a job as a prompt engineer and start writing complex software in plain English
This silliness again? Syntax isn't the problem. Syntax has never been the problem. The "hard part", if you can call it that, has always been learning how to think like a programmer. That is, learning how to approach problems and express solutions precisely enough for a computer to process. When someone says they know how to write computer programs, this is what they mean, not that they learned how to write valid statements in some programming language.
LLMs will not replace programmers, nor will they tu
Re: (Score:3)
The reason I went independent over 35 years ago was that I did not want to depend on the big corps.
And here I am, I turn 70 this year and I am still at it. Still doing what I love to do, building/fixing stuff.
I don't believe the number is only 5.7% (Score:5, Insightful)
I think going all the way back to the Amish is too far and frankly they're not doing it for the sake of jobs they're doing it for some weird religion thing. But we are definitely not ready for what's essentially a third industrial revolution. Automation has already devastated factory jobs. If factories do you happen to come back to America the jobs don't come with them. If you doubt me just go look on YouTube for how anything is made and count the number of machines versus the number of people.
None of this would be an issue if we had an appetite for socialism but we absolutely do not. The same people telling me not to worry about growing automation are the same people who would fight tooth and nail to prevent one red cent going to anyone who did work 40 to 70 hours a week to get it (unless it's a CEO then they just pretend everything's fine).
We are just not ready for what's coming. Not socially, economically or in terms of education and critical thinking
Re: (Score:1)
an appetite for socialism? (Score:2)
Re: (Score:2)
I think going all the way back to the Amish is too far and frankly they're not doing it for the sake of jobs they're doing it for some weird religion thing.
It's both. They artificially held back progress to maintain a simpler lifestyle both so that all members of their community have work to do (yeah, there's a shades of communism aspect there) and out of a belief that "idle hands are the devil's playground". Yeah, above all else their primary goal is to maintain the religious beliefs of their community, but since their adolescents are free to experience the outside world and stay there if they choose [wikipedia.org], there's a strong intrinsic motivation for the Amish to m
Re: (Score:3)
It's also important to note that the Amish aren't all uniform in what they use or don't use. The only generality in things is they believe in hard work over play. Most Amish communities also banish their kids for a couple of years once they turn 18 - this is to let them experience the world as a whole, and to let them choose - they can either return back to the community to the lifestyle they knew, or they could have the freedom to enter the modern world.
They aren't ignorant of technology at all, they just
Re: (Score:2)
Socialists like automation as much as anyone else.
Re: (Score:2)
It's not socialism to support your populace. You're not moving the means of production, distribution and exchange to the people, just being human.
Re: (Score:2)
You're not "entitled" to be employed at a job at an "acceptable" salary. You have a certain level of skill and productivity; its up to the capitalist employer to determine if they will choose to hire you and pay your salary. Even the capitalist does not have an absolute choice as to whether to pay you a certain level salary; its up to market supply in your field to determine whether you should be paid more or less.
Does this mean capitalists have a legitimate right to manipulate the worker supply or inform
Re: (Score:1)
Re: (Score:2)
I'll be fine! (Score:4, Insightful)
I'm transitioning from the IT sector into the arts... oh, wait, they already got hit. Great. And here I am, too old and out of shape for manual labour... which is slowly being replaced as AI-powered robotics becomes a thing.
Tell me again what's left?
Re: I'll be fine! (Score:2)
Re: (Score:3, Insightful)
Re: (Score:1)
Re: (Score:1, Flamebait)
Tell me again what's left?
War, of course. Trump and his elite of billionaires are tuning the old-school 3 minutes of hate all the way up to 24/7/365. Conservative sources, for instance, are commemorating how the recently approved demonizing and persecution of powerless minorities have been already resulting in increased recruitment rates.
That build-up won't be for nothing. As any autocrat knows, nothing fixes social unrest like directing that unrest at imaginary internal and external enemies.
Re:I'll be fine! (Score:5, Informative)
Re:I'll be fine! (Score:5, Interesting)
Tell me again what's left?
Plenty of jobs. The catch is, they probably don't pay enough to cover your living expenses.
One of my friends has been trying to find a new job because the company he presently works for has cut out on-call pay while still expecting 24/7 availability as part of his existing salary. They've also been laying his co-workers off and he's afraid that they'll eventually do the same for him. He's had no luck finding a similar position at another company without taking a massive pay cut.
At least according to him, the reason isn't AI but just the usual economic "right sizing" efforts of the company. Trim off the excess fat and the company's financials superficially look better, that's how the game is played.
Re: (Score:2)
Re:I'll be fine! (Score:5, Informative)
For repairs.
But if inflation/unemployment hit hard enough, new construction will slow, and plumbers will experience higher unemployment numbers.
Re: I'll be fine! (Score:2)
Re: I'll be fine! (Score:2)
Schrodinger's career (Score:2)
Whatever the case it's always your fault. It's never a whole bunch of systemic problems that were all just ignoring. No you just pick the wrong option.
Re: (Score:2)
If you go into a trade and you're doing bad they tell you you should have gone to college. If you go to college and you're not doing all that well they tell you you should have gone into a trade.
The usual right-wing talking point is that you shouldn't have majored in underwater multi-cultural gender studies or something along those lines. Most people who have achieved college degrees and find themselves disappointed with their job prospects tend to regret their choice of major, not the decision to attend college. Trade work is rough on your body and the pay is highly market dependent.
Re: (Score:2)
I'm hoping I can find a place with a former-employee discount, you know, kind of a start as an employee, end as a client sort of thing.
It's the outsourcing (Score:3)
The explosion of outsourced call centers, support centers, and cloud services in the last 10 years have cut heavily into the need for domestic employees in IT. The ease of getting H1B visas for technology work have compounded the problem, as has overseas ownership of technology companies.
Re: It's the outsourcing (Score:2)
I'm skeptical - glut from past hiring sprees (Score:5, Interesting)
Job losses in tech can be attributed in part to the influence of AI, according to Victor Janulaitis,
Part?...well how much? 10%? 1%? 0.001%? AI is not really proving itself to be useful enough to replace an employee. Sure, AI vendors make promises, but I think this has more mundane explanations. Interest rates were so low that borrowing money was nearly free...so every company began talent hoarding....interest rates rose and thus borrowing money is not free...so now companies are hiring more sensibly. The big tech firms used to perceptually hire as many sharp minds as they could and figure out what to do with them later... well...now that capital is not so freely flowing, they're doing more conventional practices, like identifying a need then hiring for it. They've gone from gluttonous appetites for spending and growth to more sensible strategies like a normal business.
So yeah, if Google, Facebook, Apple, MS, etc were all hiring 10-25% more engineers than they actually needed...with the hope that their divisions would grow into needing them in the near future...and suddenly stopped, that hits our industry really hard.
AI is making people less ambitious about hiring extra talent, but I don't believe it's at the point where it actually reduces existing needs. I work with it daily...All the major vendors produce mostly garbage. It's "kinda cool"...but at this point, I can't tell if I am spending more time fixing AI bugs from IntelliJ and CoPilot than it would have taken me to write the code without AI assistance. Both products mostly produce code that not only doesn't work or solve the problem, but often doesn't even compile. At best, it's an upgrade to StackOverflow for me. I haven't fully given up and keep trying, but realistically, it's like a roomba...fun to play with...not useless...but...no one fired their maid after buying a roomba and no one will anytime soon. No hotel replaced part of their cleaning staff with roombas. Most believe a roomba is more trouble than they're worth. Unless these LLMs improve drastically, I think something similar will happen with programmers. No one will completely dismiss Generative AI and will want their programmers to use it for potential productivity gains, but I don't think they're good enough you can cut headcount (unless you over hired in the first place).
Re: (Score:3)
All the major vendors produce mostly garbage. It's "kinda cool"...but at this point, I can't tell if I am spending more time fixing AI bugs from IntelliJ and CoPilot than it would have taken me to write the code without AI assistance.
Yep. All filler, no killer.
Re: (Score:3)
>> mostly produce code that not only doesn't work or solve the problem, but often doesn't even compile
I share your concerns but I think these things are rapidly improving.
As an experiment, today I told a coding assistant (I use Windsurf) to write an Android app that would scan for available WiFi access points and list them when a button is pushed. It constructed the project directory structure and wrote the code in under a minute. Sure enough, it wouldn't compile. But I asked it to fix the specific co
Re: (Score:2)
Re:I'm skeptical - glut from past hiring sprees (Score:5, Interesting)
Yes, but.
Grand-grandparent is underestimating the fact that it took all his (human) experience to figure out how to get from a buggy AI-generated code, to a workable product. Put someone who has never done any programming and ask him to "write an Android app that would scan for available WiFi access points and list them when a button is pushed". Pretty sure the app will never happen, even if AI generates a preliminary code version.
We have been trained, we know what bugs look like, we know how to correct them (or to steer the AI towards the correction). We have the intuition of the cause of the problem when a problem occurs. This is what makes us experienced.
It's the good old $10000 "hitting the machine with a hammer to repair it" story all over again. CEO will complain why you're asking $10000 for something which took a few minutes. AI generation costs $1. Expertise to use it costs $9999.
The long-term issue I think is that we will become lazy, ask the AI to do more and more stuff for us, and eventually lose our experience, just like after a few years of using the GPS, we lose our sense of orienteering. This is why I try to steer clear from AI (and GPS) as much as I can.
Re:I'm skeptical - glut from past hiring sprees (Score:5, Interesting)
>> took all his (human) experience to figure out how to get from a buggy AI-generated code, to a workable product
It did, no doubt, but I am very rusty with phone apps. It would have taken me far longer to research the API for the networking, look at code examples on the internet, type in the code and get the syntax right, etc. In this case it took me about 45 minutes to go from zero to something that compiled, installed, and ran correctly. This is a significant cost savings that may partially explain why IT unemployment is rising.
My next step was to ask for an enhancement whereby I could select a WiFi access point from the list and connect to it. Oddly, the coding assistant claimed that the app already did this and displayed some code that presumably accomplished it. But that code was nowhere to be found in the app. I stated that fact and it politely agreed, and then added the new code. So clearly there is a lot of room for improvement but this is already far more than it could do 8 months ago.
Re: I'm skeptical - glut from past hiring sprees (Score:2)
Re: I'm skeptical - glut from past hiring sprees (Score:2)
Re: (Score:3)
> Bottom line, most programmers will transition to a form of glorified 'prompt engineer'.
Maybe - that's about where the tech is today, but it's changing so fast it's hard to predict where it'll be in a year or so.
Actually "prompt engineer" is overselling what it is really capable of today - you are really acting as part project manager and lead developer. You really need to be a fairly seasoned software developer, as well as AI whisperer, to use today's AI to develop anything non-trivial. You need to cre
Re: (Score:2)
it's changing so fast it's hard to predict where it'll be in a year or so.
Nonsense. LLMs haven't changed in any significant way. They have the same fundamental limitations now as they did in 2022. You've been told that things are advancing rapidly, but that is a very difficult claim to support. So-called 'reasoning models', for example, aren't any different than the models that came before them. They didn't "give the model more time to think", as they claimed. They still generated each token in constant time, they just hid part of the output. They still do the exact same th
Re: (Score:2)
Bottom line, most programmers will transition to a form of glorified 'prompt engineer'.
You can't seriously still believe this. I can see how someone in early 2023 might think that this was a real possibility, give n the hype and novelty, but this is 2025. You've even used these silly toys in silly toy projects. If you still believe that nonsense, you're delusional.
LLMs can't program. They can only generate text that looks like programs. That's all they do and all they can do. They have no understanding. They have no capacity for reason or analysis. Its really that simple.
Re: (Score:2)
>> LLMs can't program. They can only generate text that looks like programs.
One did for me this morning. It made an interesting cellphone app in less than an hour. With my direction and involvement of course but I didn't write a single line of code.
I'm going to assume you have no actual experience with this tech.
It's not AI itself that's destroying IT jobs... (Score:5, Insightful)
It's the anticipation of AI making jobs obsolete that is causing CEOs to refuse to fill these positions, despite their obvious needs. That, and trying to fill senior level positions with inexperienced overseas junior developers (which has been going on forever).
The thing they miss, of course, is that AI can only answer questions. It really can't proactively figure out business needs. Further, most AI has only limited input prompts. Meaning, whatever its original output is (even if correct), must be understood by humans for further modifications to be made. There also still remains a large quality gap in what it produces. Much like what junior coders from overseas diploma mills churn out, the quality of AI code always needs to be double-checked by people capable of doing so.
But customers (meaning CEOs of technology companies) never get what they actually need, only what they think they want. So we are where we are until they learn another harsh lesson.
Re:It's not AI itself that's destroying IT jobs... (Score:5, Interesting)
It's the anticipation of AI making jobs obsolete that is causing CEOs to refuse to fill these positions, despite their obvious needs. That, and trying to fill senior level positions with inexperienced overseas junior developers (which has been going on forever).
I think this is closer to the mark though their reasoning is more rational than you imply.
LLMs are the start of a big disruption, we've seen the ChatGPT assistant, but we haven't really seen what it looks like to have the LLM integrated into a specially designed application.
So the CEOs are doing one of two things (possibly both):
1) Getting some folks working on LLM apps internally so see if they can create one of those next gen LLM apps.
2) Keeping their power dry by downsizing ahead of time. Make sure you have a lot of cash on hand when you know what to hire for and the kind of dev you need to hire.
Re: (Score:2)
LLMs are the start of a big disruption
We were all supposed to be unemployed by the end of summer back in 2023 because AI was going to radically disrupt every industry.
LLMs are the start of nothing but the next AI winter.
Re: (Score:2)
Oh I love this. Would mod you up, but it's already at +5 so I'll reply instead.
"AI is very good at answering questions. But it's a long way off from knowing which questions to ask".
(Paraphrased, yes, but I'm stealing it.)
the race is on (Score:2)
now the new arms race starts. which unemployed IT guy can make something either really good, or really bad, out of AI first? winner takes all, probably
good luck every fucking one
It's not AI taking jobs (Score:5, Insightful)
I've used these tools for months. LLMs certainly aren't taking any jobs from any decent developers doing anything significant any time soon. You basically have to describe the solution (architecture, at the very least, and sometimes all the way down to syntax) to the point where it might as well be code.
Yes, managers may not understand, but they will burn their fingers, lose some customers, and hopefully learn. It will *always* take smart people to make good software.
That doesn't mean that AI and LLMs specifically aren't a threat in numerous ways. Use the tools, keep your skills relevant. We had it too easy for too long, and it let a lot of real slackers into our industry, because we seem to have given up on engineering standards around the time that JavaScript emerged.
Re:It's not only AI taking jobs (Score:2)
There's a perfect storm against career IT jobs
- The US economy is in a recession
- Musk showed that significant cutting of staffing can work(Twitter)
- AI is perceived as a golden goose to replace staff
- Trump wants to cut the US deficit significantly, which includes a lot of government and contractor jobs. Projects and programs will get cancelled.
Re: (Score:2)
Re: (Score:2)
There's a perfect storm against career IT jobs
- The US economy is in a recession
- Musk showed that significant cutting of staffing can work(Twitter)
The US economy isn't in a recession, it's something worse - an economy that feels like a recession to a lot of people because the economy is doing fine with less and less jobs, and median wages for the people who still have jobs are falling behind inflation. Especially true inflation, which would not pretend that housing and education prices aren't a thing.
Also to anyone who doesn't get their news from Fox (which, to be fair, may be a minority of business owners), Elon has only showed that a company can lim
Re: (Score:2)
Musk showed that significant cutting of staffing can work
Going to have to call bullshit on that one. Twitter is in freefall.
AI? Nah. H-1B (Score:2)
Companies are laying off everywhere, but we still keep bringing in indentured servants. Positions go to the person willing to work cheapest, capable of offering the least push-back.
But wait, we need more H1Bs, WTF? (Score:2)
This is why I am Pop-Pooing on AI (Score:2)
At FAANG (Score:2)
It's the pandemic (Score:2)
Maybe AI is causing layoffs. But probably not. As James Carville might say, "It's the pandemic, stupid!" Overhiring during the pandemic is now being corrected. It didn't make sense to hire like crazy during the pandemic, and we're seeing the consequences of that hiring binge. Once that correction is finished, then we'll see what type of effect AI is having. But right now, the pandemic correction far outweighs the effects of AI.
Maybe it's a sign of (Score:2)
LOL no (Score:2)
We're a ways off before anyone replaces productive works with AI and still turns a profit.
IT job market waxes and wanes in tesponse to our industry's poor business planning combined with a bursts of easy capital from foolish investors into moronic startup ideas.
Probably because... (Score:2)
Demand expansion (Score:2)
Let's wait longer (Score:2)
I'm waiting for companies to grow a little more sane. I think I speak for a lot of programmers that we don't want to spend our time shoving AI shit into every product because the CEO or stakeholders think it's a good idea.
Not to say I hate working with AI; I just want it to mature more so companies can reason about it better without so much FOMO. Listen to your senior engineers ffs. My last company made zero sense with their product and engineering direction and it was extremely irritating. We had this one