A lot has been said and written about Silicon Valley behemoths announcing layoffs in 2026. What recent news stories fail to grasp is what is really happening in the job market. According to a recent report from iCIMS, tech layoffs are mostly limited to huge software companies. Outside of Silicon Valley, many everyday businesses are in a unique race to hire experts in artificial intelligence (AI).
Talent is moving from big tech into other sectors. Healthcare and manufacturing are leading the way when it comes to hiring AI experts. These industries have increased their tech hiring by eight percent and four percent respectively. In addition, they are adding smart technology to factories and upgrading medical equipment to best suit today’s needs.
United States’ job openings grew by nine percent in May compared to the year before. However, actual hiring only went up by one percent.
The gap between openings and hires due to AI
Companies that want to upgrade their technology face a bigger problem. Employers are now not only announcing layoffs due to AI, but also posting new jobs that require expertise in AI. In fact, United States’ job openings grew by nine percent in May compared to the year before. However, actual hiring only went up by one percent.
This difference shows a clear problem when it comes to hiring. Employers want to grow their teams but they cannot find enough AI-savvy workers. The total number of job applications dropped by eleven percent compared to last year. Openings for computer programmers increased by 35 percent. Jobs for software developers grew by 28 percent, and data administrator roles grew by 27 percent.
A few changes to hiring strategy due to AI layoffs
With fewer people applying for jobs, HR teams need to change their model. Waiting for new applications in longer enough to find the perfect fit. The iCIMS report suggests that recruiters should opt for internal hiring and offer training and development programs.
Companies should reach out to past applicants. People who almost got the job are far more valuable today. Keeping in touch with these workers helps companies hire faster when new roles open. Building good relationships is now imperative than simply posting a job online and waiting for resumes to roll in.
Gen Z is leading the way
It should come as no surprise that the ages of people applying for tech jobs are also changing. Young professionals are stepping up to take these complex job titles. People between 18 and 24 years old now make up 54% of all tech job applications. Those ages 25 to 34 make up another 25 percent.
Together, these younger workers account for nearly four out of five applicants. This shows that young people know where the stable jobs are. They are moving straight toward AI roles, ignored the bad headlines about AI layoffs.
The lesson for employers is pretty clear. The need for tech skills is booming. Companies that improve how they hire today will win the best workers for the future.
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