Will AI lead to massive layoffs in the IT sector and thus put employees in this sector under constant pressure, or will it reshape these jobs in a way that makes them more specialized and creative?
Artificial Intelligence Boom
As the artificial intelligence boom continues in the United States, the unemployment rate among IT workers rose to 6 percent in August, compared to 5.6 percent in the previous month, according to a report published by the Wall Street Journal and viewed by Sky News Arabia.
In August, there were 148,000 IT workers out of work, and more than 145,000 in July, according to consulting firm Janco Associates, which based its figures on data from the U.S. Department of Labor.
The report said the consulting firm found that the IT unemployment rate was higher than the national unemployment rate in seven of the last eight months, with the Bureau of Labor Statistics reporting that the national unemployment rate fell to 4.2 percent in August as the economy added 142,000 jobs.
IT unemployment at its worst
“IT unemployment is at its worst since the dot-com bubble burst in the early 2000s,” said Victor Janulaitis, CEO of Janco Associates. “The culprit this time is AI, which is causing a ‘seismic change’ similar to what was seen when personal computers came into widespread use,” according to the report.
“IT job cuts are still concentrated in traditional technology roles, such as managing corporate back-end systems, while AI and cybersecurity provide pockets of growth,” Janulaitis added.
“The most in-demand roles right now are roles where candidates have experience in security, AI and cloud computing,” said Steve Watt, CIO of Highland Software.
“In the AI space, companies are looking for people who can help them prepare corporate data for use with AI models, as well as design the tools to actually use AI,” said Vikram Navde, chief information officer at Webster Bank.
Part of the difficulty faced by recently laid-off IT workers is the mismatch between the skills they have and the salaries they expect to receive, the report said. Experts say that high salaries in the era of the pandemic and IT jobs are no longer available.
Among the big tech companies that announced layoffs last month, Cisco Systems Inc. said it would cut its workforce by 7 percent, or about 6,000 employees. Chipmaker Intel Corp. also said it would lay off 15,000 employees this year and suspend pay as part of a cost-cutting effort. In July, Intuit said it planned to cut about 1,800 jobs in preparation for a hiring spree as it pivots to artificial intelligence.
IT workers are also being laid off elsewhere, with General Motors saying last month it would lay off more than 1,000 employees globally in its software and services division.
“Tech hiring will remain under pressure next year, but the way companies manage talent has become more thoughtful,” said Dhaval Mughimani, head of the high-tech and software practice at consulting firm West Monroe. “We are likely to see more hiring in high-growth areas and a focus on innovation, while reducing headcount in non-core areas.”
Proactively develop skills
In an exclusive interview with Sky News Arabia Economy, Dr. Abdullah Al-Shennawy, an economic expert and professor of economics at Zagazig University, said: “The impact of artificial intelligence on the job landscape is undeniable, driving a shift in how we work and the skills we need. As AI technologies advance, individuals and organizations must proactively embrace change, focus on developing skills, and adopt ethical AI practices, by harnessing its power to create a future of collaborative, innovative work driven by synergy between humans and AI.”
Dr. Al-Shennawy explains that artificial intelligence works on:
- Redefining job roles across sectors: Allowing workers to focus on tasks that require creativity, critical thinking, and emotional intelligence, and AI-driven data analytics and insights enhance decision-making processes, leading to more informed strategies.
- Creates opportunities for upskilling and reskilling: Individuals can acquire new skills that complement AI systems, such as data interpretation, AI programming, and machine learning. Companies can invest in training programs to equip their workforce with the skills needed to collaborate effectively with AI technologies.
- Improve productivity and efficiency: It can process and analyze big data quickly, thus improving efficiency and productivity. Chatbots, virtual assistants, and AI-powered tools simplify communications and workflow, allowing employees to focus on high-value tasks. Predictive analytics helps organizations make proactive decisions and optimize resource allocation.
Labor market changes
On the other hand, the adoption of artificial intelligence, machine learning systems, and robotics is leading to major changes in the labor market, such as displacing manual and knowledge workers and reshaping the workforce. Robots are taking on roles ranging from assembly line workers to more complex jobs such as pharmacists and other health care assistants. Generative AI technologies also pose a threat to knowledge-based jobs in fields such as programming, robotics, accounting, and journalism.
It also poses major challenges such as job displacement, which is evident in some industries, retail and logistics. In the future, it is necessary to achieve a balance between technological progress and workforce adaptation strategies, including training and education. The future labor market is expected to be a mix of new roles created by artificial intelligence and the adaptation of existing jobs to integrate with these technologies, according to economic expert Al-Shinawi.
Regarding the new jobs needed for the rise of AI, he pointed out that “AI requires the creation of new job roles centered around its development and management, as demand for AI engineers, data scientists, and machine learning specialists increases as organizations seek to harness the potential of AI. These professionals play a critical role in designing, implementing, and tuning AI systems. To be successful, two things are essential to success in the workplace: the ability to adapt, and the ability to continuously learn.”
New opportunities and roles
“The rise of AI has created a wave of new opportunities and roles in IT. Implementing AI technologies requires a workforce equipped with skills in developing, maintaining, and overseeing AI. As a result, demand for expertise in data science, machine learning, and AI ethics has surged. AI has also spurred the emergence of specialized jobs to manage and improve AI systems, ensure ethical practices, and find innovative solutions. In fact, the shift to an AI-focused workforce is fundamentally reshaping the labor market rather than shrinking it,” he added.
Specialized reports indicate that 85 million jobs may disappear, while other reports indicate that 97 million new jobs will emerge. The labor market is evolving faster than ever before due to artificial intelligence, which may result in an increase in demand for experienced IT specialists and companies’ reliance on digital transformation supported by automation and machine learning technologies, and the emergence of new career paths from ethical hacking to data science and from cybersecurity analysis to AI ethics consulting, according to the professor of economics at Zagazig University.
Opportunity not threat
In turn, human resources expert, consultant Abdul Rahman Aref, said in an exclusive interview with the Sky News Arabia Economy website: “The prevailing belief that artificial intelligence will threaten IT jobs is a misconception. Technology has gone through multiple stages of progress, and the past decade was one of the fastest periods in this progress. Artificial intelligence now represents an opportunity to reshape jobs in the field of information technology, and to expose employees to modern skills and technologies.”
Aref believes that the new generation of IT workers are the most likely to benefit from the development of artificial intelligence, adding: “This generation has wide opportunities, and there are technological fields such as comprehensive systems software that are still not affected by the artificial intelligence hue. Therefore, opportunities are still available for those seeking to develop their skills to reach the level of complex algorithms used in artificial intelligence.”
“Artificial intelligence, even though it is a new term, does not pose a real threat to current IT employees,” said Counselor Aref. “It has not yet taken over all sectors, and what people see today in terms of AI-based applications is just the beginning of a technology that has evolved from complex algorithms and equations that already existed.”
He concluded his speech by stressing that artificial intelligence is essentially advanced human intelligence, and that it represents a natural evolution of information technology, providing new opportunities and encouraging innovation and adaptation to modern technologies.
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