While the number of US jobs declined by 23,000 in July, employment in the tech sector rebounded as the AI revolution continues to gain steam.

The national unemployment numbers were reported Friday by the US Bureau of Labor Statistics. At the same time, research firms said July was a good month for IT hiring compared to June.

According to CompTIA, which analyzed the BLS data, tech sector jobs rose in July by 3,700. In June, the IT sector had lost 900 jobs.

Companies last month hired in the cloud, hosting, information processing, data, and semiconductor manufacturing sectors, CompTIA said in a statement. 

“We’re entering a labor market where opportunity is increasingly concentrated around specific skills, industries, and investments,” said Ger Doyle, regional president of North America at ManpowerGroup, a labor consulting firm.

For example, data center hiring was up 39% in July compared to the same period last year, Doyle said. Not surprisingly, the data-center growth has been fueled by AI infrastructure needs and demand for hardware. That has helped increase the number of jobs in ancillary sectors such as transportation.

July hiring data showed heavy truck driver demand, which surged by 181% from June, Doyle said.

According to the BLS data, employment went up by 2.4% in the “computing infrastructure providers, data processing, web hosting, and related services” sectors, which is listed under the information sector.

Jobs in the “computer and electronic product manufacturing” sector — which is bunched under manufacturing — rose by 2.9% from June to July.

But bad news continued for the telecommunications sector, where the number of jobs declined by 1.5% from June to July. That continued a downward slide in recent years.

Overall job layoffs slowed in July, with 33,429 cuts announced; that’s down from 45,849 cuts announced in June, and the lowest since July 2024, according to data from Challenger, Gray and Christmas.

“Hiring has also increased over last year by 25%, so while AI is shifting the labor market, it is not dismantling it,” said Andy Challenger, chief revenue officer for Challenger, Gray & Christmas.

The tech sector announced 9,867 cuts in July, bringing the year-to-date total to 149,023 so far in 2026, according to Challenger figures.

Tech sector hiring and job losses vary as organizations use different measurement techniques to gauge the overall hiring environment. 

The top-line US unemployment rate declined to 4.1% from 4.2%, in part because of  workers leaving the workforce or not looking for jobs, indicating a slow labor market.

Still, hiring demand exists across the US, despite declining labor force participation and longer job searches, Doyle said.

Because technology underpins many of the changes occurring across sectors such as healthcare and services, employers are rethinking hiring.  “That’s why the labor market many workers are experiencing doesn’t always match the one described by the headline numbers,” Doyle said.

ADP’s National Employment report said only 44,000 jobs were added to private payrolls in July, with choppiness across sectors.

But demand for AI skills continues to rise, according to research firms that track growth by analyzing job listings. CompTIA noted that about 14,000 new job listings in July sought AI and machine learning skills.

It’s not clear how the ongoing AI boom may be hurting or helping human jobs. Many recent job cuts have been attributed to AI, though some companies have been accused of using the technology as a rationale for cuts they made for other reasons.

A recent OECD report said that even manual jobs once thought immune to AI are at risk of being taken over by robots. The OECD report said creative jobs — typically management, arts, and social work — will be least threatened by AI.

There are also increasing indications that successful AI deployments will require humans in the loop. For example, more consulting firms are using forward-deployed engineers (FDEs) to implement agentic AI. And smaller consultancy firms are finding more productivity by automating mundane work with AI and spending more time meeting client requirements.

After two decades of cloud architecture consulting, I see an unchanging pattern in enterprise deployments. Organizations approach me with unexpectedly high cloud bills, operational chaos, and architectures that look good on paper but cause headaches in production. The common thread is almost always the same. Fundamental concepts that should be foundational to any cloud deployment are treated as optional or ignored altogether.

I’m not talking about exotic requirements, bleeding-edge technologies, or vendor-specific best practices. Basic engineering principles are somehow getting lost amid the excitement of cloud adoption. I wish I could say it’s rare, but after working with organizations across industries and geographies for years, I can confirm that missing these fundamentals is more common than most people realize. The results are predictable. Bills grow faster than business value, architectures require constant firefighting, and teams are stretched too thin to optimize anything.

The good news? You don’t have to start over, but you do have to go back to basics. Here are three concepts most cloud architects overlook that will make your architecture dramatically more valuable and efficient.

Identifying common ground

When deploying heterogeneous architecture, especially in multicloud environments, organizations must aggressively reduce silos. This means establishing common control planes for security, governance, and operations. You won’t get there by relying on whatever proprietary technology each cloud provider offers out of the box. Each provider wants you locked into their way of managing things. That is fine for simple deployments, but when you are running across multiple clouds and on-premises systems, proprietary control planes introduce redundancy, complexity, and cost.

You need a single control layer that spans your entire environment. Instead of managing 10 different security solutions from 10 different providers, you have one. Instead of separate identity management systems for each cloud, you need one that works everywhere. This eliminates the need to change security parameters in five different consoles, maintain five different skill sets for five different operational models, and reconcile five different governance frameworks. The common control plane ties everything together.

This might sound hard, but it’s not as bad as you think. (I will cover the specific patterns in a future article.) The real issue is that most architects have never been trained to think this way. They were taught to select the best services from each provider rather than abstract away the differences. This fundamental gap costs organizations real money every single day.

Cost observability and optimization

Most architects treat cost visibility and optimization as afterthoughts, things that can be bolted on after the architecture is in place. That backward approach shows up in the results. Without cost observability and optimization baked into your architecture from day one, you cannot understand where your money is going, where waste is accumulating, or where you should make changes to align expenses with delivered value.

The more complex and heterogeneous your environment, the more critical this becomes. You need a unified cost observability layer that spans public and private clouds and your own infrastructure. This is about building a layer that aggregates cost data from everywhere, provides a single source of truth for spending, and delivers the insights needed to actively optimize. Without this, you are flying blind, making decisions based on incomplete data and discovering problems only after the invoice arrives.

Too many organizations fail to gain control of their cloud spending because their billing data is scattered across multiple consoles, with no way to correlate usage across providers. They cannot see which teams, projects, or services are driving costs. They miss opportunities to right-size, consolidate, or eliminate waste. You cannot improve what you cannot measure. Without a common cost observability and optimization layer built into your architecture, you will never achieve the efficiency the cloud was supposed to deliver.

Consider the human element

Here is an uncomfortable truth most architects do not want to discuss: The more complex your architecture is, the broader the range of skills you will need to keep it running. Complexity requires expertise, and expertise requires hiring, training, and retention. If your architecture demands 15 different skill sets to operate, you’d better have a plan for finding and retaining the people with those skills.

I have seen beautifully designed architectures fail because the organization could not meet hiring requirements. They compromised by hiring underqualified individuals, which led to operational failures, security gaps, and mounting technical debt. The architecture itself was sound. The human infrastructure around it was not. This is a solvable problem. It starts with acknowledging that you are not designing for yourself. You are designing for the team that will inherit this system after you have moved on to your next assignment or promotion.

The solution isn’t just simplifying architecture, though that should be a goal. The key is to consider human factors in your design. What skills are required? How can you find and train people? What cultural changes are necessary for effective operation? These questions are essential; ignoring them risks failure.

The simple bottom line

I understand why most cloud architects miss these basic principles. No single course or book brings all of this together in one place. Cloud architecture has become a collection of best practices, vendor recommendations, and conference talking points, rather than a disciplined engineering discipline focused on business value.

As a result, architectures end up optimized in the wrong places, if they are optimized at all. They are expensive to run, difficult to secure, and nearly impossible to operate at scale without constant intervention. The cloud promises efficiency, yet we are not delivering it because we have lost sight of the fundamentals.

It’s time to go back to basics. Commonality, human factors, and cost observability and optimization are the three things that separate architectures that create value from those that create cost. Incorporate these concepts into your architecture and you’ll get ahead of most production systems in use today.

AI has created a tough job environment for entry-level workers and things aren’t getting better anytime soon — even those with AI capabilities now need “senior-level” skills to land a job.

“AI-exposed entry-level roles are seven times more likely to require traditionally senior-level skills such as judgement and leadership,” consulting firm PwC said in a study released this month.

That’s because AI is changing the traditional career ladder. Companies are increasingly looking for candidates that use the cutting-edge tools and services to amplify their performance and grow faster. “Organizations must rethink how they mentor and train junior staff, helping them step up to complex decision-making much earlier in their careers,” PwC said.

Entry-level job seekers with or without AI skills are already dealing with stagnant wages,  layoffs, and stalled hiring. 

(The PwC findings echo similar concerns raised late last year in McKinsey’s State of AI report. Many companies are reducing headcount by deploying AI agents to take over entry-level jobs.)

Early-career AI job postings “have flatlined in highly AI exposed sectors,” and listings for junior roles with mid-career or senior-level skills have grown 35% since 2019, PwC said.  The consulting firm largely discounted the notion that AI is taking jobs away, though other studies point in the opposite direction. 

By the end of May, AI-driven job cuts had reached 87,174 for 2026, already outpacing the total of around 54,836 in 2025, according to figures released by Challenger, Gray and Christmas earlier this month.

The AI-driven layoffs haven’t reached the “jobpocalypse” stage yet, and workers are more productive with it, said Andy Challenger, chief revenue officer at Challenger, Gray and Christmas. But companies are rethinking hiring and long-term operational strategies as AI becomes a routine component in daily workflows and processes, he said.

Businesses are “restructuring aggressively as they reposition for an AI-driven economy,” he said.

That’s putting downward pressure on entry-level hiring as AI tools absorb more routine work, said Kye Mitchell, head of Experis US, a part of ManpowerGroup. “That doesn’t remove opportunity, but it changes the expectations. Employers now expect candidates to come in with hands-on experience, AI familiarity, and the ability to contribute faster,” Mitchell said.

Compensation remains strong for specialized, in-demand skills, while more commoditized roles such as customer service, helpdesk, and some entry-level positions  are flattening. “The shift overall is toward skills-based hiring, where demonstrable capability matters more than credentials alone,” Mitchell said.

Graduates who combine technical fundamentals with practical experience, AI fluency and strong communication skills stand out quickly. Job candidates can’t rely solely on academic credentials. 

“Employers are moving away from ‘train-from-scratch’ hiring and looking for talent that can contribute earlier and continue to adapt,” Mitchell said.

The PwC study also focused on the productivity gap between companies that have invested heavily in AI and companies lagging in adoption.

Since ChatGPT showed up in 2022, AI-exposed companies have seen productivity gains of 40% versus other companies. “The companies achieving the biggest productivity gains from AI are not using it only to cut costs,” PwC said.

AI-forward firms are also raising headcounts and wages. “Far from being a job killer, AI may actually be a job expander when used to unlock growth and enter new markets,” PwC said. 

Workers who use their domain expertise to supplement AI tools can advance, with AI-exposed roles “2.5 times more likely to rely on skills like empathy, judgement, and creativity that become even more valuable as AI absorbs some routine work,” PwC said.