Tech layoffs are on the rise, yet AI skill demand grows, creating a split tech job market that values specialized AI roles amid general employment challenges.
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An anonymous post on Reddit vividly highlighted the current state of the tech job market, resonating widely with professionals.
"I've been a software engineer for 17 years with a master's and have never seen it this bad," the Reddit poster wrote in the r/Layoffs subreddit. This individual, who reported being 43 and struggling to find work, now believes "I'm [unhirable] at this point."
The poster's candid admission spilled onto X, formerly known as Twitter, sparking a lively discussion. The writer was advised by one person to "Botox" any profile images and remove anything that could hint at age. But opinions of the overall tech job market described it as "bad" to "incredibly bad."
However, not everyone shared this sentiment. Tomas Puig, founder and CEO of Alembic, a marketing intelligence firm in San Francisco, tweeted in response that his firm has "a ton of open roles and are interviewing like mad."
Alembic is seeking people for AI-related and other software engineering jobs, including back-end, front-end and full-stack developers.
AI engineering skills on the rise
Competition to hire people for AI jobs is "fierce," Puig wrote in an email to TechTarget Editorial, but this competition also encompasses three types of AI job categories. First, companies are looking to fill applied AI jobs to develop tech for product teams. Second, enterprises are competing to fill AI research jobs, which require employees who can take new math and AI algorithms and figure out how to scale and deploy them.
But Puig said the most challenging job candidates to find are AI scientists. These are the deep researchers "who discover brand new techniques or refine current techniques in new ways," he said.
For people with the right skills, Puig illustrated a dual truth about the tech labor market -- one that analysts are also starting to see. On the one hand, it is "extremely strong," said David Foote, chief analyst and chief research officer at labor market research group Foote Partners. But on the issue of layoffs, "it's bad out there."
Since January, more than 50,000 tech workers have lost their jobs, according to Layoffs.fyi. However, Foote pointed out that tech companies are still hiring, but they're focusing on reshaping their workforces to align with emerging technical skills around AI and soft skills, such as creativity, leadership and the ability to learn.
Employers increasingly want employees with AI-related skills, which now account for at least 10% of all tech job ads, up from 6% two years ago, according to industry group CompTIA. The trend suggests that the demand for AI skills can increase even as the overall tech job market struggles with rising unemployment.
"Employers are looking to build AI skills in all technical disciplines," said Seth Robinson, vice president of industry research at CompTIA.
Victor Janulaitis, CEO at Janco Associates Inc., a labor market research firm, said, "The market is soft for IT professionals who do not have the in-demand skills."
"Until the laid-off employees get the skills, there will continue to be some very unhappy unemployed IT professionals," he said.
The tech job market's effects on computer science graduates as seen in unemployment rates and salary offers.
Unemployment and ageism
The unemployment rate for IT professionals has increased, but because labor market analysts use various government data sets to calculate unemployment rates, their percentages can differ. Janulaitis set the most recent unemployment rate at 4.3% and believes the IT job market will decline 20,000 to 30,000 jobs this year. CompTIA put the unemployment rate at 3.5%. The national unemployment rate last month was 3.9%.
AI-related areas in demand include data management; IT infrastructure-related work, such as automating systems; software development; and AI-assisted coding, CompTIA said.
Employers are looking to build AI skills in all technical disciplines.
Seth RobinsonVice president of industry research, CompTIA
Tim Herbert, CompTIA's chief research officer, doesn't see AI eliminating tech jobs. In its surveys, CompTIA found that "organizations largely expect technology to augment the existing workforce rather than reduce it."
Apart from skills and shifts in hiring, mid-career IT professionals might face problems in the labor market because of their age.
The Reddit poster's concern about age is a longstanding one in the tech sector and has been a topic of studies and reports going back decades.
One 2019 study by CompTIA found that the composition of the tech workforce skews younger. Another from Visier, a people analytics firm, concluded that "systemic ageism exists in tech hiring practices" in a 2017 study of 330,000 employees in 43 large U.S. enterprises.
"While older tech non-managers are consistently rated higher performers than their non-tech counterparts, they are less likely to be hired," it said.
A more personal look comes from a 2021 paper published by the Nordicom Review at the University of Gothenburg in Sweden, which is based on interviews by EU researchers with 18 tech workers of varying ages in multiple countries, including the U.S. It found that "tech workers over 35 are considered old in the tech industry."
Patrick Thibodeau is an editor at large for TechTarget Editorial who covers HCM and ERP technologies. He's worked for more than two decades as an enterprise IT reporter.
