Tech layoffs loom as AI skills gap widens: General Assembly report
NEW YORK, UNITED STATES — More than half of tech hiring managers (54%) expect their companies to conduct layoffs within the next year, with roles most susceptible to automation and artificial intelligence (AI) at highest risk, according to a new report from General Assembly.
The survey, which was conducted from March 11 to 19, included 273 IT hiring managers and HR professionals from companies with over 200 employees in the United States and the United Kingdom.
Automation threatens outdated and remote roles
The study found that 45% of tech hiring managers believe employees whose jobs can be replaced by AI are most likely to be let go.
Other vulnerable groups include those with outdated skills (44%), underperformers (41%), staff on deprioritized projects (33%), and remote workers (22%).
In contrast, employees with high performance ratings (62%), top talent (58%), and those with AI-related skills (57%) are most likely to be retained.
“We’re on the precipice of an unprecedented skills crisis,” Daniele Grassi, CEO of General Assembly, warned.
“Businesses are ramping up AI investments and reducing headcount in the name of productivity, but they are creating a widening skills gap that will ultimately slow transformation. It’s time to get AI skills to every employee.”
AI skills in high demand, but scarce
Despite the risk of layoffs, the report also points to opportunity: 69% of hiring managers say advancements in AI are very likely to create demand for new roles, and 76% believe there is strong potential to upskill or reskill employees slated for layoffs.
However, AI development, proficiency with AI tools, and cybersecurity are the most sought-after technical skills—yet also the most lacking among current staff.
On the soft skills front, strategic thinking, problem solving, and adaptability are in highest demand but remain scarce.
Upskilling initiatives gain urgency
Despite looming layoffs, 93% of companies are either currently investing in or planning to invest in upskilling and reskilling efforts. Yet nearly one-third (31%) admit they haven’t conducted a formal assessment of their workforce’s readiness for AI and automation.
As companies accelerate AI investments, the message from hiring leaders is clear: upskilling and reskilling are no longer optional but essential for workforce resilience in the face of rapid technological change.
