Tech layoffs surge even as US unemployment remains stable
Although the US unemployment rate held steady at 4.2% in May with 139,000 jobs added to the US workforce, nearly 100,000 layoffs were also announced — up 47% from last year, according to new data from the US Bureau of Labor Statistics and others. Tech and federal cuts led the way in layoffs, driven by economic pressure, programmatic firings and AI-driven shifts in workforce needs, according to outplacement firm Challenger, Gray & Christmas.
Technology remains a top sector for cuts amid ongoing disruptions, according to the firm’s data. In May, tech companies announced 10,598 layoffs, bringing the 2025 total to 74,716; that’s up 35% from 55,207 at the same time last year.
“Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies’ workforces. Companies are spending less, slowing hiring, and sending layoff notices,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in a statement.
Uneasiness continues to weigh on tech hiring, according to CompTIA, a provider of IT training and certification products. The unemployment rate for tech jobs in May was 3.4%, roughly in line with April’s 3.5%, CompTIA data showed. The tech unemployment rate continues to sit below the national rate.
CompTIA
Tech sector companies added a modest 1,571 net new employees in May, analysis of the BLS jobs report by CompTIA showed. Job growth in cloud infrastructure and tech services was offset by reductions in the telecommunications sector.
Tech employment across the broader economy declined by an estimated 131,000 positions. “With prior month employment gains, tech occupation employment remains in the positive for the year,” CompTIA said.
“It is undoubtedly a challenging time for employers and job seekers facing uncertainty on multiple fronts,” said Tim Herbert, CompTIA’s chief research officer. “At the same time, it requires taking a measured approach given the data continues to hold up reasonably well.”
One bright spot for tech hires in May was the finance and insurance industry, which collectively saw a 21% increase in new tech job postings; new tech job openings also rose by 16% in the retail sector, according to CompTIA.
Even so, tech layoffs have continued as AI adoption soars and economic pressures drive a major shift toward new roles and skills in the workforce. “AI isn’t replacing jobs,” said Kye Mitchell, president of tech workforce staffing firm Experis US. “It’s fundamentally redefining how work gets done. We’re seeing AI augment skillsets and make professionals more capable, faster, and able to focus on higher-value work.”
Technology only displaces jobs when about 80% of tasks can be automated — and AI isn’t close to doing that, said Mitchell. Right now, AI is enhancing skills, boosting productivity, and freeing up time for higher-value work.
Hiring for AI positions and those requiring AI skills continues to grow rapidly, according to a CompTIA analysis of data from Lightcast and Stanford University study. CompTIA found that employer job postings related to AI are up 117% year-to-date year-over-year.
Challenger, Gray & Christmas
Skills-based hiring remains core to many employers’ recruiting strategies. About half of all tech job postings did not specify a need for a four-year academic degree, seeking instead a combination of work experience, training and industry-recognized certification, according to CompTIA’s and other data.
Even so, employers are hesitant to hire. “Economic uncertainty is absolutely creating a cautious hiring environment, but it’s more complex than tariffs alone,” Mitchell said. “Our data shows employers adopting a ‘wait and watch’ stance as they monitor economic signals, with job openings down 11% year-over-year.”
Still, the tech job market is adjusting as AI adoption grows. AI skill mentions in job postings fell 10% in May but are still up 10% for the year, showing steady demand, Mitchell said.
The tech industry had been nearly bullet-proof from mass layoffs prior to 2022. After a hiring surge between 2020 and 2022 to meet digitization efforts as more people worked from home, the market shifted and began slashing jobs to readjust to the new reality.
Tech companies such Google, Amazon, Meta and others laid off tens of thousands of workers as an adjustment to over-hiring during the COVID-19 pandemic. In 2023 alone, 1,186 tech companies laid off about 262,682 staff, compared to 164,969 layoffs in 2022.
In January 2024, job cuts leaped 136% over December and hit a 10-month high, according to Challenger, Gray & Christmas.
While the labor market remained steady, there are signs that hiring across the board is softening. Open job postings fell 7% this year and new postings dropped 16% in the past month — the first full contraction of 2025. Year-to-date, new postings are flat compared to last year, according to Ger Doyle, ManpowerGroup’s regional president for North America. Doyle, however, was optimistic.
“This is a chill, not a freeze,” he said. “Workers and employers are holding steady, awaiting clarity.”
For example, he said, project management roles are up 483% year-over-year, and as the broader outlook improves, a rebound could follow, he added.
Demand for data roles is surging as companies shift from AI experiments to execution. Database architect postings are up 2,140% year-over-year, with data scientist postings up 280% — clear signs of companies building the backbone for an AI-driven future, Experis’s data showed.
“This shift is also reshaping how talent enters the industry. Entry-level opportunities are becoming more limited, making it harder for recent graduates to gain a foothold,” Mitchell said. “For those looking to break in, deep analytical and technical skills are no longer optional.”
#tech #layoffs #surge #even #unemploymentTech layoffs surge even as US unemployment remains stable
Although the US unemployment rate held steady at 4.2% in May with 139,000 jobs added to the US workforce, nearly 100,000 layoffs were also announced — up 47% from last year, according to new data from the US Bureau of Labor Statistics and others. Tech and federal cuts led the way in layoffs, driven by economic pressure, programmatic firings and AI-driven shifts in workforce needs, according to outplacement firm Challenger, Gray & Christmas.
Technology remains a top sector for cuts amid ongoing disruptions, according to the firm’s data. In May, tech companies announced 10,598 layoffs, bringing the 2025 total to 74,716; that’s up 35% from 55,207 at the same time last year.
“Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies’ workforces. Companies are spending less, slowing hiring, and sending layoff notices,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in a statement.
Uneasiness continues to weigh on tech hiring, according to CompTIA, a provider of IT training and certification products. The unemployment rate for tech jobs in May was 3.4%, roughly in line with April’s 3.5%, CompTIA data showed. The tech unemployment rate continues to sit below the national rate.
CompTIA
Tech sector companies added a modest 1,571 net new employees in May, analysis of the BLS jobs report by CompTIA showed. Job growth in cloud infrastructure and tech services was offset by reductions in the telecommunications sector.
Tech employment across the broader economy declined by an estimated 131,000 positions. “With prior month employment gains, tech occupation employment remains in the positive for the year,” CompTIA said.
“It is undoubtedly a challenging time for employers and job seekers facing uncertainty on multiple fronts,” said Tim Herbert, CompTIA’s chief research officer. “At the same time, it requires taking a measured approach given the data continues to hold up reasonably well.”
One bright spot for tech hires in May was the finance and insurance industry, which collectively saw a 21% increase in new tech job postings; new tech job openings also rose by 16% in the retail sector, according to CompTIA.
Even so, tech layoffs have continued as AI adoption soars and economic pressures drive a major shift toward new roles and skills in the workforce. “AI isn’t replacing jobs,” said Kye Mitchell, president of tech workforce staffing firm Experis US. “It’s fundamentally redefining how work gets done. We’re seeing AI augment skillsets and make professionals more capable, faster, and able to focus on higher-value work.”
Technology only displaces jobs when about 80% of tasks can be automated — and AI isn’t close to doing that, said Mitchell. Right now, AI is enhancing skills, boosting productivity, and freeing up time for higher-value work.
Hiring for AI positions and those requiring AI skills continues to grow rapidly, according to a CompTIA analysis of data from Lightcast and Stanford University study. CompTIA found that employer job postings related to AI are up 117% year-to-date year-over-year.
Challenger, Gray & Christmas
Skills-based hiring remains core to many employers’ recruiting strategies. About half of all tech job postings did not specify a need for a four-year academic degree, seeking instead a combination of work experience, training and industry-recognized certification, according to CompTIA’s and other data.
Even so, employers are hesitant to hire. “Economic uncertainty is absolutely creating a cautious hiring environment, but it’s more complex than tariffs alone,” Mitchell said. “Our data shows employers adopting a ‘wait and watch’ stance as they monitor economic signals, with job openings down 11% year-over-year.”
Still, the tech job market is adjusting as AI adoption grows. AI skill mentions in job postings fell 10% in May but are still up 10% for the year, showing steady demand, Mitchell said.
The tech industry had been nearly bullet-proof from mass layoffs prior to 2022. After a hiring surge between 2020 and 2022 to meet digitization efforts as more people worked from home, the market shifted and began slashing jobs to readjust to the new reality.
Tech companies such Google, Amazon, Meta and others laid off tens of thousands of workers as an adjustment to over-hiring during the COVID-19 pandemic. In 2023 alone, 1,186 tech companies laid off about 262,682 staff, compared to 164,969 layoffs in 2022.
In January 2024, job cuts leaped 136% over December and hit a 10-month high, according to Challenger, Gray & Christmas.
While the labor market remained steady, there are signs that hiring across the board is softening. Open job postings fell 7% this year and new postings dropped 16% in the past month — the first full contraction of 2025. Year-to-date, new postings are flat compared to last year, according to Ger Doyle, ManpowerGroup’s regional president for North America. Doyle, however, was optimistic.
“This is a chill, not a freeze,” he said. “Workers and employers are holding steady, awaiting clarity.”
For example, he said, project management roles are up 483% year-over-year, and as the broader outlook improves, a rebound could follow, he added.
Demand for data roles is surging as companies shift from AI experiments to execution. Database architect postings are up 2,140% year-over-year, with data scientist postings up 280% — clear signs of companies building the backbone for an AI-driven future, Experis’s data showed.
“This shift is also reshaping how talent enters the industry. Entry-level opportunities are becoming more limited, making it harder for recent graduates to gain a foothold,” Mitchell said. “For those looking to break in, deep analytical and technical skills are no longer optional.”
#tech #layoffs #surge #even #unemployment
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