Machine Learning Upends Tech Jobs

"The rise of artificial intelligence is affecting job seekers in tech who, accustomed to high paychecks and robust demand for their skills, are facing a new reality: Learn AI and don't expect the same pay packages you were getting a few years ago.

Recently laid-off information-technology workers aren't quickly finding new roles because of a mismatch between the skills they have, and how much they expect to be paid, said Victor Janulaitis, chief executive of consulting company Janco Associates, which bases its findings on data from the Labor Department.

"They want a job for $200,000, and they're not finding it because they don't have the skills," Janulaitis said. "If they were an accounts receivable project manager, and they don't know anything other than that, they're going to have a hard time finding a job."

Jobs in areas like telecommunications, corporate systems management and entry-level IT have declined in recent months, while roles in cybersecurity, AI and data science continue to rise, according to Janco's data. The average total compensation for IT workers is about $100,000, making the position a target for cost-cutting.

When companies were flush with capital, many overhired and overpaid IT workers, Janulaitis said. Now, with higher inflation and interest rates, "The chickens are coming to roost, and they're saying, 'Wait a second, we don't need those positions,' " he said.

There is reason for IT workers to be concerned. Layoffs in the tech sector are continuing at a steady drumbeat, with Cisco planning to cut 5% of its workforce, DocuSign cutting 6% of staff, and Expedia announcing 9% staff reductions in February. The unemployment rate for IT professionals dropped to 4.3% in February from 5.5% in January, but it is higher than the 3.9% U.S. unemployment rate, Janco found.

A combination of AI skills shortages and a difference in salary expectations will likely lead to fewer IT jobs created this year, Janulaitis said, forecasting the IT job market in the U.S. will shrink by 20,000 to 30,000 jobs in 2024. The IT sector grew by 700 jobs in 2023 -- a drastic slowdown from the 267,000 jobs added in 2022.

There are signs that jobs on the path to replacement by automation and AI -- especially in entry-level IT services and data-center operations -- aren't coming back.

"There's not a CIO alive that would say automation is not important," said Eric Johnson, chief information officer of PagerDuty, a provider of digital operations management tools. The question, he said, is whether workers replaced by automation can shift into higher-value activities.

In February, salaries for software developers declined on a month-to-month basis for the first time since the start of Indeed's pay data in 2019. Postings for coding jobs have fallen by 67% from March 2022 to the end of February, said Nick Bunker, Indeed's head of economic research for North America.

Generative AI remains at the top of many companies' technology priorities -- putting workers with any skills in large language models in highest demand, and commanding the highest salaries, Bunker added. The average salary potential for generative AI skills is $174,727, according to Indeed.

Jobs related to generative AI have grown 30-fold from last year, Indeed's data shows. AI job listings overall are up 42% following the public release of ChatGPT in late 2022, according to University of Maryland researchers." [1]

1.  Machine Learning Upends Tech Jobs. Lin, Belle.  Wall Street Journal, Eastern edition; New York, N.Y.. 19 Mar 2024: B.4.