Reclassification is making US tech job losses look worse than they are

IT hiring ticks up in January, but unemployment climbs to 5.7%

The latest job numbers from the US Bureau of Labor Statistics make IT hiring look like it's in freefall, but that's not the case at all, says consultancy firm Janco. 

In its recent analysis of the IT job market, Janco Associates highlighted that the U.S. Bureau of Labor Statistics (BLS) reclassified several job titles, leading to a downward adjustment of over 111,000 positions for November and December 2024. This revision contributed to an overall decline of 123,200 IT jobs for the year. Despite these adjustments, Janco notes that IT hiring is currently on the rise. 

"Many CEOs have given CFOs and CIOs the green light to hire IT Pros," Janco CEO Victor Janulaitis said of the first month of 2025. "IT Pros who were unemployed last month found jobs more quickly than was anticipated as CIOs rushed to fill open positions."

There's still a 5.7 percent unemployment rate in the IT sector in January, Janco noted, which is greater than the national average of 4 percent - and which could rise further as Elon Musk's Department of Government Efficiency (DOGE) pushes ahead with federal workforce reductions aimed at streamlining operations.

"Over the past several quarters much of the overall job growth was in the government sectors of the economy," Janulaitis said. "With the new administration that will in all probability not be the case in the future.

"The impact of the DOGE initiatives has not been felt as of yet," Janulaitis added. "Economic uncertainty continues to hurt overall IT hiring." 

Despite this, Janco reported an addition of 11,000 new IT roles in January. Unfortunately, there's also been a surge in IT unemployment over the same period, with the number of jobless IT pros rising to 152,000 in January - an increase of 54,000 in a single month. 

While Janco focuses narrowly on core IT roles in enterprise environments, CompTIA's analysis of the wider tech industry paints a more optimistic picture based on the same BLS statistics from the past month. 

CompTIA reported a tech industry-wide unemployment rate of just 2.9 percent, and said that IT services and software development hiring offset considerable losses in the telecom sector in January. 

Companies seeking new tech professionals aren't overwhelmingly looking for IT roles, CompTIA said. UI/UX designers, data scientists and data analysts were the jobs with the highest monthly gain in hiring. Tech support specialists were included in the top five, falling into the number four position, and systems analysts rounded out the top five. 

Shifting back to Janco's more focused look at enterprise IT roles, "the highest demand continues to be for AI, security professionals, new technology programmers, and internet processing IT Pros," Janulaitis said. Janco expects AI to reduce demand for entry-level IT positions in the coming months as automation takes over routine tasks. As to where the jobs can be found - don't go knocking on the doors of the biggest of big tech firms. 

"We have found hiring and job growth continues to be in small to mid-sized enterprises," Janulaitis said. "Many of the larger firms continue to be focused on improvements in productivity and replacing lower-level skills with AI applications." 

Closing out the report, Janco offered a mixed outlook: While IT jobs are expected to grow over the next few years, many white-collar roles could be eliminated.

"Over the next five years, the number of individuals employed as IT professionals will increase while many white-collar jobs in the function will be eliminated with the application of AI and LLM to IT," Janco predicted. ®