Between October and November, the tech workforce shrank by 134,000, while more than 6,800 tech positions were cut across various industries. The number of job postings also fell sharply, dropping by over 31,800.

Chief economist at Moody's, Mark Zandi, said that the US tech sector was in recession.

“The data is pretty definitive that the tech industry is struggling,” he said, adding that the dip in job postings points to a prolonged slowdown. Employers, uncertain about the economy and the role AI will play in the workforce, are now largely in "wait and see" mode, according to surveys of chief information officers by CompTIA.

The tech unemployment rate remains below the national average of 4.6 per cent, which hit its highest point since 2021 in November, but the gap has been narrowing. Tech joblessness has been rising faster than the national rate in recent months, a worrying trend that suggests the sector may be facing ongoing difficulties.

Outplacement firm Challenger, Gray & Christmas said that major tech companies have already announced over 141,000 job cuts, a 17 per cent jump from last year. At the same time, big players like Google, Microsoft, Meta, and Amazon are investing up to $375 billion in AI infrastructure this year.

AI has quickly become a dominant force in the job market. CompTIA’s analysis found that 41 per cent of all active tech job postings now require AI skills or are for AI roles. Zandi highlighted that while AI expertise can open doors, those without it may struggle.

"If you have AI skills, there seem to be jobs. But if you don’t, I think it’s going to feel like you’ve been hit by a dump truck," he warned.

As AI continues to redefine the tech industry, the job market is evolving rapidly, and those without the proper skills could face tough competition in the near future.