The tech industry has been hit hard by layoffs over the past year as companies have right-sized after a hiring binge during the pandemic. However, there is hope on the horizon for tech workers in the form of artificial intelligence (AI). Businesses and investors are excited about what AI could mean for future earnings and worried about falling behind competitors. While AI may eventually destroy millions of jobs, the products and services responsible for this do not yet exist, meaning that companies need to build them and will require tech workers to do so.
After a year of layoffs, there is evidence that tech employment is stabilizing, with some indications that it may even be rising slightly. According to layoffs.fyi website, which tracks tech layoffs, job cuts have declined for three straight months since peaking in January. In April 2022, there were as many layoffs as last October.
If job cuts were a result of overhiring during the pandemic and falling stock prices, then there comes a time when companies have done enough. A year is a reasonably long time for a headcount correction, and with stock prices stabilizing at an appropriate level, the theme emerging from tech companies this quarter was all about AI: what it will mean for their businesses and their investment plans to capitalize on it.
Investors assume that no one can build an AI empire by continuing to cut jobs; if you’re still cutting jobs while other companies are making AI investments, then maybe you don’t have an AI plan or are just foolish. No CEO can afford that perception.
Interestingly enough, this shift from cutting costs to investing in AI is already showing up in labor market data. Jobs website Indeed.com tracks job postings over time and found that since mid-April 2022 new listings (those posted in the last seven days) for software developers have increased by 30%. The rally in timing makes sense given the recovery in stock prices and corporate comments on staffing levels and AI plans.
If AI ends up being the job-killing force that some fear, we’ll cross that bridge when we get to it. In the short term, the promise of AI is changing the psychology of tech companies from cuts to maximize profits towards another potential arms race as companies fight to win the future. A stabilized job market for tech workers is another bulwark against the recession that most people continue to fear but one that keeps shifting into the future.
The nub, while layoffs have affected many tech companies over the past year, there is hope on the horizon for tech workers in the form of AI. As businesses and investors become more excited about what AI could mean for their futures, they are beginning to invest in this area and hire more workers. This shift in focus could be good news for everyone, creating a stabilized job market and potentially preventing a recession from taking hold. According to sources cited in this article ( it seems like now is an excellent time for tech professionals looking for work or considering a career change to explore opportunities within this growing field.
