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ZDNET’s key takeaways
- Tech job volume has been shrinking over the past three years.
- Large tech vendors are shedding jobs, but demand is high among small businesses.
- Skills with a solid future: AI, creativity, and business acumen.
The dour news keeps coming. A new analysis of US Bureau of Labor Statistics (BLS) data shows the IT job market is shrinking. However, one needs to look beyond the traditional IT field to see where opportunities are blossoming.
First, let’s get the bad news out of the way: The current IT unemployment rate is 4.5%, according to a recent report from Janco, which estimates there are at least 118,000 unemployed IT professionals at this time. In the last 24 months, the IT job market has shrunk by over 179,000 jobs, the consultancy said. The IT job market shrank by 131,200 in the last 13 months and by over 179,000 in the last 24 months. Also, this is the third year in a row of shrinkage.
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According to the latest revised BLS data, the IT job market shrank by 9,600 jobs year to date. At the same time, the BLS reports there are more than 200,000 open IT positions.
Add to this dour analysis reports of mass layoffs at the top of the tech chain — as announced by Salesforce, Microsoft, and Oracle — and one may be forgiven for assuming the worst.
Second, there’s a caveat: While the report’s authors add a note of caution — as BLS regularly adjusts its jobs data upward or downward following an initial data release — they indicate they see the shrinkage as “a long-term trend.” In addition, cuts and freezes among federal agencies have put many IT contracts on hold.
There is a bright side
Now, let’s discuss some silver linings. M. Victor Janulaitis, CEO of Janco and the report’s author, sounded somewhat optimistic, noting an uptick in retail sales in the macro economy and subdued inflation at about 2% to 3%. He predicted that IT opportunities would expand in the last two quarters of 2025.
“Our data shows the positions available will be in SMBs versus larger enterprises, as they prepare for the implementation of the approved federal budget and tariffs,” Janulaitis noted. “Perhaps that is a good omen for long-term IT job market growth. Historically, over 50% of all IT jobs have been created by small to medium businesses.”
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The Janco report added that most of these unfilled IT positions are associated with artificial intelligence (AI), large language models, blockchain, and omni-commerce. “AI is showing its impact in IT as many customer service and monitoring positions are automated. CIOs we interviewed have expressed a need to hire new staff to meet AI initiatives and the focus on productivity,” Janulaitis said.
Within the AI space, Python programming skills and AWS management are in greatest demand, an earlier McKinsey analysis showed. While there is also concern about the future of software engineering, these roles are being redefined upward within organizations.
Brian Peret, director at CodeBoxx, said AI is the big factor in IT employment disruptions. “Almost every way to display text, sound, and image — almost every way to gather information from users and sources — has already been translated into code. AI tools are increasingly generating large amounts of code of higher quality using a fraction of the resources.”
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Across the industry, observers see growing opportunities in key areas such as AI. Demand for technology skills is uneven at this point. “Generalist software roles are down, but demand for applied AI and data pipeline engineering is certainly rising,” said Wyatt Mayham, lead AI consultant at Northwest AI Consulting. “Companies are cutting back on dev roles that don’t directly tie to revenue or cost savings automation. That’s what we see in our consulting practice clients, which span from healthcare to aerospace.”
Demand is changing, not dropping
We’re hearing a lot about IT job losses, “but they don’t tell the whole story,” said Daniel Gorlovetsky, CEO at TLVTech. “Yes, some traditional software roles have slowed down, especially in over-saturated segments like junior full-stack devs or bootcamp grads. But that’s not because demand for tech is dropping — it’s because the nature of that demand is changing.”
At Gorlovetsky’s company, for example, “we’re hiring, but we’re looking for people who can solve problems, not just write code,” he related. “AI, data engineering, platform security, real-time infrastructure — those areas are still hot. What’s cooled off are generalist dev roles where the work can now be automated or handled by leaner teams with better tooling.”
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If anything, there is more selectivity at the entry level of technology careers, Mayham said. “Before, junior engineers could still land roles and grow. The bar for IT hires is higher, and companies expect AI literacy and cross-functional skills out of the gate.”
Seeing traditional IT roles evolve “isn’t really a surprise, but given the hype about AI and other automation elements it certainly can feel cataclysmic,” said Zbyněk Sopuch, CTO of Safetica, “The reality is that IT pros — and especially entry-level ones — need to rethink how to apply their skills and experience; and it is not a dead end for skilled professionals.”
Sopuch observed that most of the growing opportunities today are in cybersecurity, compliance, and data governance. “Organizations are under constant regulatory and risk pressures. That means those with technical skills can transition to roles where they help companies protect sensitive information and meet new compliance mandates — making them more valuable given the nature of what’s at stake.”
Elevating roles, resumes, and resilience
Along with AI, data, and cybersecurity skills, IT professionals can elevate their roles, resumes, and resilience in the following ways:
Creativity and imagination: Those seeking to advance in the technology field need to have a range of soft skills, including creativity and business acumen. “There are two main and contrasting buckets of skills I’m seeing employers value these days — advanced tech skills and soft skills,” said Peret. “On the tech side of things, employers want technologists who can leverage the most recent, powerful tools — often AI-based — to add value to teams. On the soft-skills side, the ability to communicate, collaborate, and present professionally has become a distinguishing skill set.”
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In addition, with artificial general intelligence (AGI) on the horizon, the need for greater imagination will grow, said Julie Ferris-Tillman, vice president at Interdependence. “Professionals — whether in marketing and PR or investments or software development — will be well-served by leaning into creativity. If we can’t dream big enough to build solutions beyond today’s reach, we won’t capitalize on what AGI can deliver. Future tech innovation and practice requires extraordinary thinking and belief now more than ever. If tech professionals are looking to boost skills, they might explore writing, art, music, and more to flex creative muscles and sharpen the skills that drive ideation.”
Business acumen: “Focus on your business acumen — your ability to see how tasks impact the bottom line,” said Peret. “Focus on your personal development, specifically communication and professionalism. The modern workplace requires top-notch professionals able to execute diverse and deep workloads using the most impactful tools. Be ready.”
Tech hiring has always had cycles, said Gorlovetsky. “But what’s different now is the pace of change. AI isn’t just disrupting how we work — it’s reshaping what we need from a team. It’s not enough to know a language. You need to understand systems, outcomes, and often how tech fits into a business model.”
Team playing: “I think an underrated skill that most developers just don’t have is the logic and business mindset behind why they are doing what they are doing,” said Mayham. “Are you shipping something that moves a business metric? Learning how your product and revenue teams think will make you stand out.”
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Learn how to “think across disciplines,” Gorlovetsky said. “Pair your tech skills with communication, product thinking, or even design. The engineers who will thrive in this market are the ones who can build and translate, who understand both the system and the customer.”
“And if you’re early in your career, AI is huge. But don’t just chase hype. Get really good at something useful, then layer AI on top.”
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