Through open-source tracking, Layoffs.FYI provides key statistics on how the recession is affecting the IT industry. Over 410,000 tech employees were laid off from May 2022, when the tech downturn started gaining significant traction, through December 2023. The peak of tech job losses occurred in January 2023 with 276 tech companies laying off close to 90,000 employees.
While monthly tech layoffs have decreased significantly since then, they have not stopped. Over 5,000 tech professionals reportedly lost their jobs in November and December. With professionals wondering when the tech industry will recover, a more impactful question to focus on is what will drive the recovery. Multiple signs point to AI, specifically generative AI, as the thing that will pull tech out of this recession.
A Historical Perspective of AI
Significant historical milestones have played a vital role in reshaping both the economic and societal landscape. The industrial revolution, as an example, stands out for its profound impact, despite historical evidence indicating that it took nearly 100 years for its transformative effects to fully manifest in the modern era.
In comparison, the internet era achieved a similar transformation in nearly half of that timeframe. It began with computers at Stanford and UCLA communicating with each other for the first time and has evolved into today’s widespread use of cloud technology by both businesses and individuals. The internet has quickly become a central part of our daily lives that influences how we work, communicate, shop, bank, read, listen to music and navigate travel with its accessibility making these activities commonplace for nearly everyone.
While the foundation of AI can be traced back to the Turing test in the 1950s, it was OpenAI’s launch of ChatGPT in November 2022 that unleashed the full potential of generative AI to everyone. Within days of ChatGPT being launched, AI captured the attention of a variety of demographics, ranging from middle schoolers to CEOs. Today, AI continues to be integrated throughout our homes, schools and workplaces, ranging from shop floors to office cubicles to boardrooms.
AI is the next historical gamechanger, and it could be the most powerful to date.
New Tech Leads the Way with AI
OpenAI is not the only company revolutionizing the way people and organizations perform or approach tasks. Tech companies at the forefront of this revolution are actively developing and implementing innovative solutions that are infused with AI to address challenges in nearly every industry. In the healthcare industry, for example, several companies are bringing industry-changing technologies to both the clinical and operational sides of the business.
On the clinical side, Viz.ai, an AI-powered company focused on disease detection and intelligent care coordination, received a De Novo approval from the FDA for a hypertrophic cardiomyopathy (HCM) AI detection algorithm, a new regulatory category for cardiovascular machine learning-based notification software. This innovation is intended to detect suspected HCM in previously undiagnosed patients and quickly connect them with the appropriate care.
From an operational perspective, companies like Thoughtful.ai have developed AI-powered platforms that streamline and speed up the entire healthcare revenue cycle management (RCM) process, from eligibility and patient intake to claims processing, collections and revenue reporting. AI-infused improvements like this allow companies to maximize their profitability and help them achieve operational excellence.
Old Tech Regains Relevance with AI
In the early stages of the pandemic, several tech companies went on hiring sprees when their customer demand for cloud-based solutions reached new heights. Rising interest rates and inflation combined with stagnant or declining customer demand led to many of the tech layoffs throughout the last year and a half.
Two of the most impactful ways a tech company can generate new business is by either attracting net new customers or increasing their existing customers usage of their tech solutions by enhancing their product suite with AI capabilities. An example of this is old-school tech powerhouse Alphabet, where according to Nasdaq, they have infused AI across the businesses to:
- Optimize the Google search engine
- Moderate YouTube content
- Power Waymo, its autonomous driving division
- Provide actionable insight for Boston Dynamics, its robotics are
Additionally, Microsoft has made PowerPoint new again with Copilot. This implementation of generative AI lets users create professional presentations by supplying an existing Word document, outline or select word prompts. By leveraging innovative AI technologies, old-tech companies can maintain, or in some cases regain, their relevance in a highly competitive industry.
The Need for AI Creates New Tech Jobs
For companies that are developing new AI solutions or embedding existing technologies with AI, or for companies that are moving in that direction, one thing has become clear: AI solutions require a new breed of tech professional that can bring experience and a deep understanding in three key areas:
- Machine learning
- Data analytics
- Natural language processing
Now, tech companies are creating brand new jobs in areas like engineering, product management and corporate strategy with a focus on AI. This strategy serves a dual purpose of propelling themselves out of the tech downturn while simultaneously positioning the company for long-term sustainable success.
With the Rise of AI Tech Jobs, Recession Woes Will Recede
All signs point to the tech industry being on the cusp of a transformative new era where AI will increasingly power and automate critical business functions, a shift that can revitalize tech companies struggling with recessionary challenges.
The increasing number of companies creating or expressing interest in new AI-focused tech roles signals the best sign yet of a path toward economic recovery.