The acceleration of artificial intelligence (AI) transition and economic uncertainty have led the U.S. IT industry to undertake a major restructuring. While corporations are reducing the hiring of full-time developers and instead focusing on contract workers, job seekers are struggling to find suitable employment.
On the 18th (local time), The Wall Street Journal (WSJ) reported that U.S. corporations are exhibiting a phenomenon of "great hesitation" regarding overall hiring. In response to the uncertain market conditions, they are selectively hiring only essential personnel, and the hiring process is taking up to 2 to 3 times longer than in the past.
According to a recent survey conducted by Robert Half among about 250 senior technology managers, 65% of respondents indicated plans to increase contract hiring this year.
The required competencies listed in job postings have also significantly increased compared to the past. According to WSJ, the number of job competencies required by U.S. corporations has risen to an average of 10 to 12, up from the previous average of 6 to 7. This increase is particularly notable in the demand for job competencies reflecting AI technologies.
The hiring methods are also shifting in ways that disadvantage job seekers. From the phone interview stage, there is pressure to lower salary expectations, and it is increasingly common for companies to suddenly cancel hiring just before the final interview stage. Recently, Steve Levin, who is job hunting after being laid off, said in an interview with WSJ, "I was about to have my final interview for a sales engineer position, but I received a notice that the hiring plan was suddenly withdrawn."
The background of the frozen hiring market lies in the strong cost-cutting strategy of IT corporations. According to the U.S. Bureau of Labor Statistics (BLS), the number of IT job openings across the United States decreased by about 214,000 in April. Both large big tech companies such as Microsoft and medium-sized IT corporations are reportedly reducing their workforce. Especially, entry-level roles like new developers and data analysts are being rapidly replaced by AI, resulting in severe impacts.
In contrast, jobs based on AI technology are still in high demand. WSJ reported that about one-quarter of job postings in the U.S. this year require AI-related competencies. According to the business platform LINKED, AI-related job postings in the U.S. have increased by approximately 640% over the past eight years.
Corporations are focusing the reduced expenses on investments in AI. For example, Luis Von Ahn, CEO of the English learning service Duolingo, stated in a recent company email, "We will only allow new hires for roles that cannot be automated by AI," and added, "We will also reflect the use of AI in performance evaluations." As a result, employees affiliated with corporations are constantly developing their AI capabilities to avoid being left behind in the survival competition.
Annie Murray Consultants, which offers salary advisory services for technical personnel, explained that "the only job seekers with competitiveness in the current hiring market are those specializing in AI-related fields," adding that "even those must possess a Ph.D. to have any chance of survival."