Artificial intelligence advancements continue to be a primary source of optimism for the technology ecosystem and a partial counterbalance to challenges in media and entertainment.
In July and August, tech employment deceased by a net 15,000 jobs each month as the writers strike took a toll.
Employment data released Friday reflects not only that optimism, but also that wages in the industry are stabilizing at least for now—a welcome development in the middle market.
Tech employment came in at 3,051,000 for August after a net decrease of 15,000 jobs in the information sector, according to Bureau of Labor Statistics data.
The decreases were led by dips in the motion picture and sound recording industries (16,800 jobs) and among broadcasting and content providers (3,600). Those are not a complete shock when considering the Writers Guild of America and Screen Actors Guild strikes, along with consumers wringing out the last bits of summer.
Tech companies appear to have switched from the direct and obvious means of managing headcount through mass layoffs to the more subtle hiring pauses and attrition management. August marks the second consecutive month in which the decreases in tech employment were greater than reported layoffs.
In July and August, tech employment deceased by a net 15,000 jobs each month, and tech layoffs for the two months were 6,527 and 9,220, respectively, according to Crunchbase. The reported tech layoffs, then, help to tell some—but not all—of the story.
Throughout most of this year, tech layoff figures have generously exceeded monthly reported fluctuations in tech employment. From January to April, layoffs totaled 135,000 and employment was only down by 24,000. More directly, while large public technology companies were laying off hundreds of thousands of workers, the overall tech employment levels remained largely steady or reflected relatively minor decreases.
Read more of RSM’s insights on technology and the middle market.
The resilience of the tech labor market has largely been credited to advancements in artificial intelligence and the strength of the middle market. Will it turn out to be enough?
Tech layoffs for August through the 25th of the month were 9,220, according to Crunchbase, with most coming from public companies that accounted for 8,090, or 88%. The remaining 1,130, or 12%, occurred at private middle market tech companies.
The breakdown between layoffs from public versus middle market isn’t new. In most months, the layoff split between public and private has ranged between 75/25 to 90/10.
Unemployment rates for the information sector, in aggregate, jumped from 3.2% for last August to 4.1% for this August . Most notable were the changes to the information unemployment rates for men and women year-over-year, which more than doubled and almost halved, respectively.
There is a silver lining for middle market technology companies. For years, they lost the competition for talent against large public tech companies, but the cost of technology labor appears to have stabilized, at least temporarily.
The average weekly earnings for information workers in August was $1,745.20, up by only $16.92, from $1,728.28 last August. The increase is less than 1% year-over-year and should prove more than manageable—if not welcomed—by middle market players.
Finally, even with a couple consecutive months of employment contraction, overall employment levels remain near 15-year highs, a reflection of the resilient technology ecosystem and economy.