Tech hiring stalls as AI hype, layoffs, tariffs, economic uncertainty, more collide

And coming up next, Trump's World War Fee

The hint of optimism to be found in February's tech jobs numbers? Yeah, it's pretty much gone, according to multiple analyses of the latest data out from the US Bureau of Labor Statistics for March. 

February's stats from Janco Associates and CompTIA's reports may have sent mixed messages, but March is looking clearer, which isn't to say encouraging. And this is all before the ongoing fallout from President Trump's staggering global tariff war.

According to Janco's latest report, terminations have outpaced hiring for IT professionals in each of the past three quarters. At the same time, IT unemployment in the US peaked at 5.7 percent in January and remains elevated at 5.0 percent in March, higher than the national average of 4.1 percent, though that's more about people leaving the industry than landing new gigs, it seems.

We're seeing a consistent downturn in the tech labor market as tech leaders continue to manage continued concerns over economic stability

"We're seeing a consistent downturn in the tech labor market as tech leaders continue to manage continued concerns over economic stability," Forrester VP and research director Mark Moccia told The Register. "Combined with a relative slackness in the tech talent market, this means tech leaders are being slower to hire, as they are reluctant to take on additional costs right now that they may not be able to sustain." 

Janco CEO Victor Janulaitis told us that while IT unemployment has dipped slightly in recent months, more than 34,000 jobs were lost in Q1 2025 alone. That contradiction, he said, reflects a shrinking workforce rather than a hiring rebound - a pattern that echoes the dot-com bust, when older IT pros near retirement simply exited the market altogether.

Forrester's Moccia echoed the sentiment, suggesting tech professionals are opting out rather than competing for a scarce number of open positions. And it's not just veterans heading for the exits.

"Roles are being filled, but at a much slower pace than before, with much more experienced talent, and in many cases, lower compensation than in previous years," Moccia told us. "Early career tech talent is struggling to find employment in the industry, and may well be exiting the technology industry altogether." 

That's similar to what CompTIA reported this month, which showed a net loss of tech jobs in March and a growing hesitation on the part of companies to bring in new talent. CompTIA chief research officer Tim Herbert called the results unsurprising.

"With many employers in wait-and-see mode, the jobs data is about in line with expectations for the month," Herbert said. 

Not-so-great expectations

It really is a one-two punch of lousy circumstances for IT pros right now. On one hand, there's the ever-present economic uncertainty, which every expert we spoke to flagged as a primary reason for the slowdown in hiring. On the other, companies are backed into an AI corner - and it's not just about swapping staff for the latest automation gadgets. 

Return on investment in AI has become a hot topic for business leaders after years of spending big on the tech with little to show for it. The payoff hasn't materialized, leaving execs scrambling to justify their shiny, underperforming toys.

The promise of AI efficiency is certainly impacting tech leaders' choices on how quickly to backfill roles, or whether roles should be backfilled at all

"The promise of AI efficiency is certainly impacting tech leaders' choices on how quickly to backfill roles, or whether roles should be backfilled at all, slowing overall hiring," Moccia said - with an interesting caveat that's further constraining budgets. 

"While organizations are investing in building AI capabilities, we are … not seeing significant growth in overall technology budgets, meaning that the investment is coming from deprioritizing other initiatives," Moccia added.

In other words, less cash is going to hiring for roles like tech services and support - which, according to CompTIA, were among the sub-sectors hit hardest by job cuts last month.

All these factors, Moccia said, are piling extra pressure on hiring managers trying to fill the few open roles that still exist.

"Because of the overwhelming volume of applicants, [hiring managers] struggle to find the relevant, qualified talent within that pool, creating a sub-optimal experience for both applicants and hiring managers," Moccia said.

He added that rapidly changing budgets and internal inconsistency over whether to fill open roles are just making matters worse, leading to an erosion of trust between job seekers and employers. 

Toss in some, as we said, arguably bonkers tariffs from the Trump administration that are rattling global markets and casting a long shadow over the tech job landscape, and it's clear this isn't a great time to be job hunting in IT in the States.

Not to mention the off-shoring of work to cheaper countries, which is making a big impact, too.

"No one has a crystal ball, but with many economic indicators pointing to a potential recession, and with inflation likely hitting consumers ability to spend, all creating more economic instability, resulting in organizations reluctant to add significant headcount," Moccia predicted. "This all could lead to increased IT job losses, and slower IT hiring over the coming months." 

What can an unemployed or unhappily employed tech professional do in this environment? Maybe pour a pint, sit tight, and hope this all blows over … preferably without things getting even worse. ®