IT Unemployment Rises to 5.7% as AI Hits Tech Jobs

It works like this. Find whatever is hot that day, week or month then put it after the "as".

Stock market down as Trump holds another signing. Stock market up big as Musk slashes government spending.

But specifically this is probably mostly driven so far by tech support industries. "IT" being customer service reps who use a computer to respond to chat messages, in some cases.

Or actual tech support that's had its entire entry system stripped and replaced by an AI-guided walkthrough of predefined steps customers are required to take before they talk to a human. This will certainly have impact on the amount of support staff needed, even if a portion of that is simply frustrating customers into searching for answers themselves.

"Another reason for January’s tech job losses was that companies began implementing some intended spending cuts for this year, Janulaitis said, and many slashed budgets based on what the economy looked like during fiscal planning last year."

There are several important things to look at that show this. First and foremost, IT has about a 40 year history now, with corresponding economic data.

In its entire history, its been uncorrelated with interest rates and other assets. These correlated assets are what most people refer to when they speak of wider economic circumstance. The IT industry is uncorrelated with this, with 40 years to back that up.

IT labor markets are however strongly correlated with advances in information technology. This correlation is found throughout that dataset as well, in both the boom and bust cycles.

The deep unemployment which we are seeing here, which doesn't include the first batch of laid off employees two years ago [18 mo], is only correlated and impacted by Information Technology advances.

There is only one such major advance that has been made in this time period... Artificial Intelligence.

AI has improved dramatically from a modular swappable design, and it can replace entry level positional tasks completely. It probably won't ever be able to take over the senior level positions, or the mid level positions, but that doesn't matter.

The companies involved in integrating these things into the production environment have mislead most of their customers, and in the process burnt all the bridges. Many of these companies market towards replacing workers with AI, grossly negligent of the whipsaw they are creating with that misleading narrative. In the short term they make lots of profit, while destroying the environment they need to sustain themselves.

By choking off the professional development pipeline which is a sequential pipeline in developing talent, this leaves few opportunities to progress to mid and senior level positions, which were few and far between to begin with.

When there is no economic incentive to go into any specialized field because AI has burnt the only bridge for a long-term career, people don't go into these jobs. Worse, those caught surprised by this change in circumstance, who actually have sufficient experience to perform at these mid-level ranges, may abandon the profession causing exponential brain drain. As anyone knows, people age and eventually die. Senior level people are at greater risk to this than others.

This inevitably creates a tsunami of cost in those irreplaceable positions which cannot be addressed by the market, and balloons far above what the market can bare. The forward looking expectations have made any labor in this industry worth less than AI services, and IT as a general rule is a labor multiplier where changes here eventually expand and infect everywhere.

Business is not constrained in hiring people because many business receive operations funding upfront from their financial engineering which often comes from money printers. By the time they notice the problem, it will be too late to solve it, in many respects its already too late because you have people who are incredibly competent, near geniuses, and they see no future in the industry and are retraining ahead of the curve.

AI threatens society because it disrupts the core pillars of society, which is indirect but immeasurably important to sustained organization of labor and food production. Agriculture is dependent on something like 64 different intermediate producers to maintain production levels sufficient to feed people.

Failures back to pre-modern industrial technology would mean half the people alive today starve to death, no matter how much they work.

These are the issues which the article doesn't really touch on correctly but its WSJ so what do you expect. Their journalism has never really been up to snuff.

In our company we're not seeing any major impact on productivity yet and no jobs were lost. Yet.

It is right there, in the headline, sir. The economy is so good, like never before. /s

Putin is covertly manipulating Poland with the same games as he did with Ukraine. And now it appears increasingly likely he has the right guy in the white house to take what he wants.

Like, only now?! This had been the case my entire career to the point I got fed up of rat race to the delight of foreign superior, became cynical and unemployable. It's not ey-ay, nor outsourcing, it's the economay. We have a crisis, sir.

This was totally predictable. If your job can be shipped to Kansas from SV because it is cheaper, it won't be too long before it is shipped to Canada which cheaper than Kansas and then to Colombia.

But HN is still embracing remote work. I hope those in the US/Western Europe wake up soon otherwise all the coding jobs will go the way of manufacturing jobs very soon - either done by robots or done by cheaper labor in Asia or Africa or LatAm.

Small org, no low-performers, no layoffs. Same result as everywhere else.

Yet.

I continue to hope that the net result of programmers getting more productive is an increase in demand for our skills, as employers realize they can get a whole lot more value for their investment. It might take a while for that to shake out though - we need companies to realize they can take on more ambitious projects now.

Let's say you're trying to build a product/feature. You have general timelines for the launch. About 5 years ago, it would take a team of 10 to deliver it. Now, let's assume there were productivity gains, and you can deliver it with a team of 8.

This would not necessarily be a problem if for 20% of the workforce cut, you would also start getting investments and create 20% more companies/features. The big uncertainty is, will this ever happen, or it'll end up with 10% increment in such activities, so you still have that extra person hanging around.