Tanks

Last week’s disappointing jobs report showed U.S. job growth stalled significantly in August, with just 22,000 new jobs added, and an unemployment rate that has risen to 4.3%.

It was the worst August report since the pandemic and the market treated it accordingly, welcoming it for the potential rate cuts it may herald but wary of the slower growth it may portend.

“The labor market is showing signs of cracking,” Heather Long, Navy Federal Credit Union senior economist, wrote in a note to investors on Thursday. “It’s not a red siren alarm yet, but the signs keep growing that businesses are starting to cut workers.”

Tech was not spared

Recent employment data confirms an increasingly uneven landscape within the technology sector, reflecting a shift away from the rapid job growth that characterized the early post-pandemic years.

According to a recent analysis by research think tank CompTIA, the sector has experienced a net decline of approximately 2,700 jobs over the past year, a 0.1% decrease.

This contrasts sharply with the period from late 2020 through 2022, when tech companies collectively added over 628,400 jobs across 29 months.

However, the last two years have seen almost 100,000 of those positions cut, indicating a recalibration amid the broader economic and geopolitical shifts.

“Unevenness in the data means acknowledging the employers and job seekers struggling with a multitude of challenges but also recognizing it is not all doom and gloom,” Tim Herbert, chief research officer, CompTIA, said. “Hiring intent data continues to show employers pursuing tech talent across a range of disciplines, from AI and data science to tech support and cloud engineering.”

The hottest spot for hiring was unsurprisingly in the AI skills job listings, which leapt 94% year-over-year according to CompTIA’s AI Hiring Intent Index.

For job postings themselves, 16% were for workers with eight or more years of experience; 21% for workers in the zero to three year range; and almost a third were for workers with four to seven years of experience.

Tech is booming in some surprising areas

Who is hiring and where is also an interesting standout.

Large tech companies showed signs of large hiring sprees: Software publishers like Microsoft and Oracle have collectively added 16,100 jobs in the past year, signaling ongoing strength in areas linked to cloud computing and enterprise software.

But other marquee-name companies like computer-systems designers such as IBM and Booz Allen Hamilton have shed 28,800 roles, reflecting a tilt toward automation and project-specific staffing.

“Only three states, Maine, Delaware and Idaho, saw tech job postings increase in August. In each instance, the increase was less than 100 new postings,” the report found.

“The story was similar at the metro level, with just four markets recording growth. San Jose saw an increase of 127 job postings, from 5,808 in July to 5,935 in August. Little Rock had the biggest percentage increase (+ 10%) in job postings, from 987 in July to 1,090 in August.”

Nancy Tengler, CEO of Laffer Tengler Investments, attributes this trend to increased corporate investment in technology infrastructure and automation rather than direct employment.

“Companies are investing in technology instead of human capital,” she notes in the report.

While some segments remain resilient, the disparate nature of job growth is clear.

The CompTIA analysis underscores the broader narrative of an industry undergoing structural transformation, shifting gears from hiring sprees to strategic investments in technology.

As firms prioritize capital over traditional labor, questions about the future of tech employment and how the workforce can adapt to these changes remain central for policymakers and industry leaders alike. For more details, consult the full report at Morningstar here.

Source link