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AI Displacing Entry-Level IT Jobs, per Report
Employment was down for customer service, telecommunications and hosting jobs.
IT consulting firm Janco Associates suggested that the 2023 IT jobs market remains rocky.
There was a 4.3 percent unemployment rate for IT professionals in September, surpassing the overall U.S. unemployment rate of 3.8 percent, Janco reported last week. It was a poor showing for IT employment prospects, according to Victor Janulaitis, CEO of Janco.
"Based on our analysis, the IT job market and opportunities for IT professionals are poor at best," he noted.
There were 117,00 unemployed IT pros in September, by Janco's count, while organizations listed about 130,000 unfilled IT positions. Janulaitis attributed this gap to a "a skills mismatch." However, he also pointed to the elephant in the room, namely artificial intelligence.
"AI is displacing some IT Pros and eliminating some entry level positions as tools for AI are enhanced in ChatGPT, Natural language procession (NLP), TensorFlow (Google), Image Processing, PyTorch (Facebook), generative AI content creation, Midjourney, AI chatbot, Model tuning, and Sable Diffusion," Janulaitis said.
Entry-level positions most negatively impacted by AI, per Janulaitis, include those in "customer service, telecommunications, and hosting." In those fields especially, executives are turning to automation to streamline processes and, inevitably, thin their headcounts.
"CIOs and CFOs are looking to improve the productivity of IT by automating processes and reporting where possible," he said. "They are focusing on eliminating 'non-essential' managers, staff, and services."
AI also has a flip side, as the skills in highest demand are in the realm of AI. An earlier study by the firm indicated that despite AI tools being relatively accessible, "there are too few IT Professionals who are skilled and experienced in their application and use," creating a sort of bidding war between companies for IT pros that do have that expertise (case in point, annual salaries for AI prompt engineers are being advertised to be as high as $335,000).
Demand is also strong for IT pros with expertise in security, blockchain and programming.
Besides these few bright spots, however, Janco expects the IT jobs market to remain tepid, at best, before it ever gets better. Persistent fears of an economic downturn will likely dissuade organizations from hiring, resulting in a contraction in the 2023 IT jobs market amounting to 20,000 to 30,000 positions, Janco suggested.
"Layoffs at big tech companies continue to hurt overall IT hiring," Janulaitis concluded. "CIOs are looking at a troubling economic climate and are evaluating the need for increased headcounts based on the technological requirements of their specific business operations."
The year 2023 ushered in lots of industry layoff announcements, such as Microsoft's 10,000 jobs cut announced in January, job cuts by cloud service providers and more.