This isn't your typical economic downturn. Previous crashes in 2000 and 2008-09 eventually bounced back. But this time, there's a wild card nobody fully understands: AI.

Tech job market - job posting decline since 2022

The Numbers Don't Lie: Tech Job Market Reality Check

Let's look at the data.

In 2025 alone, 171 tech companies have laid off approximately 80,250 employees. That's 489 people losing their jobs every single day.
But it gets worse when you break it down by experience level.
- Entry-level tech job postings are down 34%, while senior roles are down 19%. The lone bright spot is that machine learning engineer roles saw postings up 59% from 2020.
The geographic impact isn't equal either: Austin tech jobs are only down 28%, while non-tech jobs are up 11%. Meanwhile, Boston tech jobs crashed 51%, with non-tech down just 8%. This tells us that location matters quite a bit.
Software development postings are down 33% from February 2020, making it one of the hardest hit sectors. But the pain isn't distributed evenly across all tech roles.

Why the Tech Job Market Collapsed

Three major forces created this mess. Understanding them helps you navigate what's next.

1. The Post-ZIRP Hangover

Remember 2021? Companies were hiring like crazy. Some employers nearly doubled their headcount between 2019 and 2022.

Why? Zero Interest Rate Policy (ZIRP) made money cheap. Venture capital flowed like water. Everyone thought the growth would last forever. It didn't.

Microsoft laid off about 6,000 workers, nearly 3% of its workforce and its largest job cuts since 2023. The company simultaneously committed billions of dollars to AI investments while cutting headcount.

Google parent Alphabet noted that their post-pandemic layoffs followed several years of rapid hiring fueled by fast growth.

We're now paying the price for 2021's optimism.

2. The AI Disruption Nobody Saw Coming

Here's where it gets murky: AI is reshaping the market entirely.

Research shows AI is already automating or augmenting 25% of daily tasks across many jobs. In tech specifically, about 56% of computer and math job tasks can be automated or augmented.

Young tech workers aged 20-30 have seen unemployment jump by 3% since early 2024. These are the roles easiest to automate.

The tech job market: lots of difficulties — *These days, posts like this are commonplace on Reddit*

Indeed research has found substantial overlap between the capabilities of existing GenAI tools and many of the skills and tasks listed in U.S. tech job postings. This overlap is driving the drop in job postings for traditional tech roles.

Goldman Sachs estimates 6-7% of all workers could lose their jobs to AI automation in a baseline scenario. The tech job market is ground zero for this transition.

Companies are reallocating budgets from human headcount to AI infrastructure. Microsoft employed 228,000 full-time workers as of June 2024, with about 55% of those workers in the United States, yet it's cutting thousands while investing billions in AI.

3. Economic Uncertainty Hits Tech Hardest

The broader economy affects every sector. But the tech job market feels economic headwinds more acutely.

The end of the "zero interest rate period" created less supportive economic conditions. Venture funding dried up. Companies that raised at inflated 2021 valuations can't meet growth projections.

Job openings/postings need to pick up in roles with fewer opportunities than in 2020, including software development (-33% fewer postings than February 2020), marketing (-24%), and media & communications (-26%).

The Winners and Losers in Today's Tech Job Market

AI is simultaneously destroying and creating opportunities in the tech job market. Understanding which side you're on determines your career trajectory.

The Harsh Reality of Displacement

Entry-level positions are getting hammered. People working in entry-level marketing jobs are using generative AI to create first drafts of promotional or campaign documents, and early career data analysts are relying on AI to prepare datasets.

Of the 149 tech titles with at least 1000 postings in early 2025, only 28 (19%) exceeded their pre-pandemic level, while almost the same number of titles had dropped by over 40%.

The decline hits specific roles hardest. Software engineers, still the most common tech job title, are down 49% from pre-pandemic levels. Declines were especially sharp among jobs in the middle of the tech wage-spectrum, including specialized developers such as Android, Java, .Net, and iOS, as well as web developers — all down by over 60%.

MIT research shows AI will replace 2 million manufacturing workers by 2025. But finance jobs might disappear even faster because everything is data-based.

Unemployment rates for many technology roles remain below the national average, with software developers at 2.8% in Q1 2025, and rates for systems analysts (1.8%), security analysts (2.3%), IT and user support specialists (2.5%), and database administrators and architects (2.6%) even lower.

The Skills Premium Paradox

Here's what's wild about today's tech job market: Job postings for non-tech roles that require AI skills offer 28% higher salaries—an average of nearly $18,000 more per year.

More than half of all jobs requesting AI skills in 2024 appeared outside the tech sector—a radical reversal from previous years, when AI was confined to Silicon Valley and computer science labs.

Fields like marketing, HR, finance, education, manufacturing, and customer service are rapidly integrating AI tools. The tech job market is experiencing a massive skills migration.

In 2024, more than 66,000 job postings specifically mentioned generative AI as a skill, a nearly fourfold increase from the prior year.

What's Actually Growing

Jobs directly related to AI, such as machine learning engineers, are among the few tech jobs with postings still above early-2020 levels.

AI expertise has become increasingly valuable as organizations seek professionals who can develop and implement solutions ranging from customer service chatbots to predictive maintenance systems.

77% of AI jobs require master's degrees, and 18% require doctoral degrees. The barrier to entry is rising fast, but so is the compensation for those who can clear it.

According to research for the Demand for Skilled Talent report, the most evident skills gap on technology teams is within AI, machine learning and data science.

Regional Breakdown: Where The Market Still Works

Geography matters quite a bit. Some cities are weathering the storm better than others.

Austin shows resilience with tech jobs down only 28% compared to non-tech jobs growing 11%. The city's diverse economy and business-friendly environment provide a buffer against pure tech dependency.

Boston faces tougher challenges with tech jobs down 51% while non-tech jobs declined only 8%. The concentration in traditional tech sectors without sufficient AI pivot may explain the sharper decline.

Silicon Valley is seeing fundamental restructuring rather than cyclical decline. Companies aren't just cutting costs – they're reimagining what tech work looks like.

Remote work opportunities have fallen from their 2022 peak, both overall and in most sectors, including traditionally remote-friendly sectors like tech. This shift affects geographic flexibility for tech workers.

Sector-Specific Analysis

Not all tech segments are suffering equally. The pain concentrates in specific areas while others show surprising resilience.

Software development represents the hardest hit segment. Software development postings are 33% below February 2020 levels. Mid-paying roles face the steepest declines because they're precisely the skills AI can replicate most easily.

Hardware and semiconductors show mixed signals. Intel announced mass layoffs at multiple U.S. locations, with around 2,400 workers in Oregon laid off and 1,935 jobs cut in California. Yet the company simultaneously invests heavily in AI chip development.

AMD's 1,000-person reduction occurred while raising its 2024 data center AI chip revenue forecast to more than $5 billion. The message is clear: hardware companies are pivoting to AI-focused products and trimming everything else.

Cybersecurity maintains relative strength. Security analyst unemployment remains at 2.3%, well below the national average. AI creates new security threats faster than it solves existing ones, maintaining demand for human expertise.

What Makes This Job Market Different

Previous downturns were cyclical. Companies cut costs, waited for recovery, then hired back. This time feels different.

The 2000 dot-com crash exposed bad business models. Good companies survived and thrived. The 2008-09 financial crisis was a credit crunch affecting everyone temporarily. Recovery was broad-based once credit markets normalized.

Tech job postings were already plunging before the dawn of the new AI age. Nearly half of the net decline in tech postings between their peak and July 2025 occurred before the public release of Chat GPT-3 in late 2022.

Unlike earlier technology transformations, like the automation that's taken place in industrial settings, AI is relatively easy to adopt to improve or take over human tasks. As Steven Adler, a former OpenAI researcher, notes: "AI workers are just software, and so you don't need to buy expensive physical machinery".

This isn't a temporary disruption. It's a fundamental shift in how work gets done.

Navigating the New Reality

The data shows clear patterns for survival and growth in today's tech job market.

If you're job searching, focus on roles that complement rather than compete with AI. The most AI-exposed jobs tend to be technical, such as data engineers, database administrators, IT specialists, and cybersecurity personnel, as well as financial workers such as auditors.

The most exposed jobs are also adopting AI the most, making them more productive. In some of these occupations, up to 30% of workers are already using AI to perform their day-to-day tasks.

Geographic strategy matters more than ever. Foreign interest in job postings on Indeed has picked up since the pandemic and is well above 2019 levels, suggesting international opportunities may offer better prospects.

For those currently employed, the key is making yourself layoff-proof. Technology hiring trends in 2025 indicate that candidates place a high value on exposure to AI and machine learning projects, as these skills significantly enhance their career trajectories.

Skills development should focus on AI collaboration rather than competition. Most workers will use AI to automate repetitive tasks, leaving them more time to work on creative or relational aspects of their job.

The Long-Term Outlook

PwC's 2025 Global AI Jobs Barometer reveals that AI can make people more valuable, not less – even in the most highly automatable jobs. Research shows wages are rising twice as quickly in those industries most exposed to AI compared to those least exposed.

Revenue growth in AI-exposed industries has accelerated sharply since 2022, the year that the launch of ChatGPT 3.5 awakened the world to AI's power. This suggests the future tech job market will be smaller but potentially better compensated.

Tech occupation employment over the next 10 years is expected to grow at about twice the rate (2x) of overall employment across the economy. The replacement rate for tech occupations during the 2024-2034 period is expected to average about 6% annually, or approximately 350,000 workers each year.

The timeline suggests continued pressure through 2025, market stabilization around new AI-integrated roles by 2026-2027, and a new equilibrium with different job categories and requirements by 2028.

Your Plan

The tech job market isn't dead. It's evolving. And evolution rewards the adaptable.

Start by auditing your skills against AI capabilities. Identify which of your tasks could be automated and focus on developing complementary skills that enhance AI output rather than competing with it.

According to Indeed's "Tapping Into Today's Tech Talent" report from October 2024, Python is the most in-demand skill in job listings, followed by experience with AWS, which enjoyed the largest growth in demand in the last year.

Consider roles outside traditional tech that value tech skills. Marketing, design, education, and HR are some of the fastest growers in AI adoption, often offering better job security and competitive compensation.

Build expertise in areas where human judgment remains essential. Jobs that require physical work, human connection, and hands-on skills are the safest from AI replacement.

The tech job market of 2025 isn't the same as 2020. But for those willing to adapt, opportunities still exist. They just look different than before.

The key is understanding that this isn't a temporary downturn – it's a permanent transformation. Those who adapt to the new reality will thrive. Those who wait for things to go back to "normal" will be waiting forever.

The tech job market is evolving. The question is: Will you evolve with it?

Frequently Asked Questions

Should I consider moving to find better tech job opportunities?

Geography matters more than ever. Consider secondary tech hubs that may have better job-to-candidate ratios than traditional Silicon Valley markets.

Will the tech job market recover to pre-2022 levels?

Unlikely in the same form. Tech job postings were already plunging before the dawn of the new AI age. Nearly half of the net decline in tech postings between their peak and July 2025 occurred before the public release of Chat GPT-3 in late 2022. This suggests structural rather than just cyclical changes. The market will stabilize, but at different job categories and skill requirements.

Is remote work still an option for tech jobs?

It's declining. The share of postings advertising remote opportunities has fallen from its 2022 peak, both overall and in most sectors, including traditionally remote-friendly sectors like tech. Companies are pulling back on remote options, but opportunities still exist, especially for experienced professionals.

Which tech skills are actually in demand right now?

Python is the most in-demand skill in job listings, followed by experience with AWS. In 2024, more than 66,000 job postings specifically mentioned generative AI as a skill, a nearly fourfold increase from the prior year.

Are tech layoffs going to continue in 2025?

Likely yes. In 2025, 171 companies have laid off approximately 80,250 employees so far, and experts expect job cuts to continue as companies adjust to economic headwinds and AI capabilities. However, the pace may slow as companies finish their post-pandemic right-sizing.

How much can AI skills actually boost my salary?

Significantly. Job postings for non-tech roles that require AI skills offer 28% higher salaries—an average of nearly $18,000 more per year. 44% of organizations boost pay for workers with AI and machine learning skills according to Robert Half's 2025 salary guide.

Should I avoid entering the tech industry right now?

Not necessarily. Tech occupation employment over the next 10 years is expected to grow at about twice the rate of overall employment across the economy. The key is entering the right areas. Machine learning engineers saw postings up 59% from 2020, while traditional development roles struggled.

Author

Alex Khamis is a Certified Professional Resume Writer and Managing Partner at Final Draft Resumes and Resumatic.

He has over six years of experience helping job seekers create compelling career narratives on top of 12 years of business and technical communications experience in the engineering industry.