Layoffs loom for underskilled tech workers and poor performers – but there's light on the horizon for those willing to upskill

Tech hiring managers expect more layoffs to come later in 2025, with roles ripe for automation and workers with outdated skills the most likely to be cut.

In a survey by General Assembly, 54% of hiring managers said their companies were likely to cut staff, while 45% revealed those most replaceable by AI were firmly in the crosshairs.

Alongside being easily replaceable by AI, other factors making staff vulnerable include having an outdated skill set, cited by 44% of tech hiring managers, and poor performance compared with their peers, mentioned by 41%.

Performance-related job cuts have become a recurring talking point in the tech industry this year. In January, reports noted that job cuts at Microsoft would take performance metrics into account, with underperforming staff set for cuts.

A third said that those who work on projects that have been deprioritized would be likely to go, with 22% citing those who work remotely.

Employees' best bet for keeping their job is to have a high performance rating, according to 62% of tech hiring managers. Nearly as many cited employees deemed 'top talent', with a similar number saying employees with AI-related skills were also likely to keep their jobs.

Other positive factors included working on priority projects, having had a long tenure, and working in the office rather than at home.

In terms of specific technical skills, the highest-rated was AI development, cited as the most important by a quarter of tech hiring managers, followed by cybersecurity at 20%, and data analysis at 14%.

Strategic thinking was the most in-demand soft skill, followed by problem solving and adaptability.

Daniele Grassi, CEO of General Assembly, said the survey highlights the precarious position tech workers find themselves in on both sides of the Atlantic.

"We’re on the precipice of an unprecedented skills crisis,” Grassi said. “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."

There’s some light on the horizon for tech workers

There is good news for many of those worried about their jobs. Nearly seven-in-ten hiring managers said it was very likely that advancements in AI will create demand for new roles, rather than simply render many obsolete.

More than three-quarters said it’s very likely there will be the potential to upskill or reskill the employees slated for layoffs.

Research from Gartner last year noted that while AI is expected to impact roles in software engineering, for example, many in the profession will be able to upskill to avoid being caught up in layoffs.

Questions over responsibility also loom heavy for many tech firms exploring the prospect of AI-related job losses, the survey found. Typically, the IT department is responsible for managing the rollout of AI and automation at 65% of organizations.

But a disconnect between IT, HR, and hiring managers means some enterprises could create more problems down the line by automating roles.

Nearly one-third of tech hiring managers said their organization has not conducted a formal assessment of potential talent gaps that could emerge due to automation, for example.

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