AI's Impact on US IT Job Market: Unemployment Rises as Entry-Level Positions Face Automation

US IT unemployment rate climbs for fifth consecutive month to 5.5%, AI blamed for job losses

In brief: After we had some good news about the UK tech jobs market last week, a new report on the US equivalent doesn't paint such as a rosy picture. The unemployment rate among IT professionals rose to 5.5% in May, marking the fifth month in a row that it has exceeded the national US average. The report, from IT management consulting company Janco, states that the unemployment rate for IT pros in the United States jumped 0.9% from 4.6% in April to 5.5% in May. As highlighted in another report from Janco in January - and mirrored in the recent data on the UK's job market - most open IT positions in the US right now involve work on large language models. Janco also pointed to roles related to blockchain technology and omnichannel commerce being in high demand. "IT opportunities for IT pros will be poor except for AI implementations, which focus on improved productivity and staff reductions," Janco wrote. As for the roles that are suffering most, the report notes that many job losses were concentrated in the communications sector, as well as those related to reporting, monitoring, and support. IT professionals who will be feeling the pressure most are those with "legacy" skills located in smaller markets such as Nashville and Tulsa. Professionals in bigger locations like New York and Dallas are less likely to be affected. Unsurprisingly, Janco writes that AI has been responsible for the eradication of many entry-level IT positions, especially those in telecoms. It's also eliminated IT jobs in compliance reporting and management. "Companies do not have the desire to hire new staff to meet mandated compliance requirements," wrote Janco CEO Victor Janulaitis. "Ergo, they are focusing on AI to automate as many of those tasks as possible, especially for reporting and monitoring." Generative AI has been automating jobs for several years now, despite repeated claims from execs that the technology is there to augment, not replace, workers. With more companies embracing AI agents - designed to replace humans in many roles by autonomously handling workflow decisions - the situation is expected to worsen. Sebastian Siemiatkowski, CEO of buy now, pay later giant Klarna, is so concerned about AI replacing white collar jobs that he believes it will cause a recession. Dario Amodei, CEO of AI firm Anthropic, has a similar view. He said last month that AI could wipe out about half of all entry-level white-collar jobs in the next five years, leading to unemployment spikes up to 20%.

US tech jobs are on the slide as AI snaffles entry-level jobs

Roles involving LLMs, blockchain and omnichannel models are most secure Driven by widespread economic uncertainty and influenced by rapid AI adoption, new research has claimed the US IT job market could be declining. Figures Janco highlighted a 5.5% unemployment rate among IT professionals in May 2025, compared with 4.6%, bringing unemployment within the sector above the national average for the fifth month in a row. The report also highlights both regional shifts and the modernization of the IT sector, with legacy skill holders in smaller markets more likely to be affected than forward-thinking workers in major tech hubs. Janco found many losses were concentrated in telecommunications, and other roles relating to reporting, monitoring and support. On the flip side, roles involve large language models, blockchain and omnichannel commerce looked to be the most secure. "There continues to be uncertainty in the outlook for new IT job creation. For five consecutive months, the IT Unemployment rate has been greater than the national unemployment rate," Janco CEO M. Victor Janulaitis said. Although roles relating to AI development are among the most secure, the figures suggest that AI could be replacing many entry-level IT jobs, particularly within the telecommunications sector. The trend suggests a shift, rather than total worker displacement, however workers who fail to adapt to higher-skilled roles could risk being left behind. Many businesses now report using AI agents to handle workflow tasks traditionally done by humans, including decision-making. Looking ahead, Janco forecasts a continued IT job market decline for the third year in a row, with future roles potentially looking significantly different to traditional IT sector roles.