AI-Driven Automation Fuels IT Job Cuts as Companies Embrace Cost Avoidance Strategies

U.S. IT sector unemployment rose by 1.8% from December to January, hitting 5.7%, outpacing the overall U.S. jobless rate of 4%. AI-driven job losses in tech stem from increased spending on AI infrastructure without corresponding IT job creation. Companies increasingly use AI to automate tasks instead of hiring new workers, a strategy tech leaders call cost avoidance. White-collar unemployment is at its highest since 2020, as demand for knowledge-based jobs lags behind in-person skilled labor roles.