US Tech Jobs Fall in September as Rising Costs and Economic Instability Squeeze the Market

US tech jobs shrank in September, reversing a surprisingly strong August and dashing hopes that the labor market for technology workers had stabilized. A cluster of fresh reports paints a picture of an industry caught in a squeeze from rising costs, political uncertainty, and a pickier hiring environment.

What the numbers show

According to tech consortium CompTIA, the technology sector lost 10,350 positions in September, down from the 14,700 positions cut in August. That’s a smaller drop within the core tech industry itself.

But the broader picture is steeper. When you include IT roles across every industry — not just companies that classify as “tech” — tech jobs fell by roughly 6,000 in September. That’s a sharp reversal from the 86,000 positions added in August.

CompTIA’s figures come from an analysis of the US Bureau of Labor Statistics’ September jobs report. That report found only 29,000 nonfarm jobs were added in the US in September, below expectations. For comparison, the US added 133,000 jobs in August.

Tech worker unemployment rises, but stays below the national rate

CompTIA noted that tech worker unemployment ticked up to 3.3% in September. That’s still comfortably below the 4.2% national rate, so technology professionals remain relatively insulated — at least on paper.

The strong August numbers had raised optimism that tech hiring was stabilizing after years of layoffs. September’s figures, by contrast, quickly punctured that hope.

Layoffs surge even as new cuts ease

Separately, tech companies announced 10,799 job cuts in September — a 77% rise from the 6,103 announced in August, according to numbers from Challenger, Gray & Christmas.

So far this year, the tech sector has cut 165,925 jobs, up 54% compared to the same period in 2025. Across all sectors, US employers cut 43,281 jobs in September, down from 52,881 in August.

That last detail is worth unpacking: the number of layoffs eased month over month, yet new hiring hasn’t followed. Employers are clearly taking a wait-and-see approach rather than committing to fresh roles.

Why employers are pulling back

Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, said the cautious hiring stems from rising costs and political uncertainty — even though fewer jobs were being cut compared to August.

“Employers are facing high energy costs, an uncertain war in Iran, a rate hike that could make hiring more expensive, plus the likelihood of surging healthcare costs,” Challenger said.

Ger Doyle, ManpowerGroup’s regional president in North America, put it more succinctly: “The market is no longer defined simply by how many people employers hire, but by how precisely they hire.”

In other words, companies are tying jobs directly to strategic business priorities and filling only the roles they consider essential, rather than hiring to fill seats.

Where AI fits into the cuts

Earlier this year, AI was frequently cited as a primary driver of job losses. In September, though, it played a smaller role. AI was cited for only 3,961 of the 43,281 job cuts — about 9% of the month’s total, per Challenger, Gray & Christmas.

On a year-to-date basis, AI was cited for 120,136 job cuts so far in 2026, which accounts for 21% of all cuts.

The skills mismatch: openings persist

Even as tech jobs declined overall, there’s a notable mismatch between layoffs and hiring. CompTIA pointed to Lightcast job posting data showing US employers posted 272,040 new IT job openings in September — a 16% increase from September 2025.

That gap suggests employers aren’t stopping their search; they’re just looking for very specific skills. ManpowerGroup says AI skills are the most in demand.

“The roles that matter most also take the longest to fill,” Doyle said. Job postings typically stay open for 61 days, while filling engineer roles takes about 77 days.

Rows of empty, darkened office desks with chairs pushed in, evoking post-layoff emptiness, cool blue lighting, editorial — Rows of empty desks signal layoffs as tech firms tighten hiring in September.

Active job postings requiring AI-related skills totaled 349,821 in September, up 32,327 postings from August, according to CompTIA.

What this means for you

For tech workers, the takeaway is nuanced. The overall market has cooled after a surprisingly strong August, and layoffs are running ahead of last year’s pace. But unemployment for tech professionals remains low, and employers are actively posting IT roles — just for specialized talent.

If your skills align with AI or other high-demand areas, you’re likely in a strong negotiating position. If your role is more general, expect a longer, more competitive search. The message from recruiters is clear: precision matters more than volume now, and a single specialized skill can set you apart in a tightening market.

What you can do

Consider upskilling in AI-adjacent areas if you haven’t already, given the surge in AI-related postings. Keep your profile visible, and be prepared for a longer hiring cycle — postings are averaging two months to fill. Diversifying into a specialized, in-demand skill set is the most reliable hedge against a pickier, more selective job market.

Source: Computerworld

Over to you: With AI-related postings surging while general roles dry up, are you investing in new skills now, or waiting for the market to cool?