Updated / 13th August 2026

Stable employment figures not what they seem as tech industry loses 35,000 jobs in a year.

Steady employment figures have masked the loss of 35,000 high-tech jobs over the past year, with warnings that workers losing what have been some of the best paid roles in the economy are becoming harder to absorb elsewhere.

Around 71,000 jobs were lost across services in the year to the first quarter of 2026, according to analysis from the Employment and Recruitment Federation (ERF).

High-tech services accounted for half of that figure, shedding 35,000 roles, while 36,000 were lost in labour-intensive services.

The tech sector is at the forefront of the impact of AI on jobs because some roles are becoming automated, but also because the scale of new investment in AI infrastructure means tech employers are seeking cost savings elsewhere.

So far, the haemorrhaging of tech roles has been offset by growth in areas like construction, industry and transport, where employment increased by 56,500, meaning the overall number of people in work remained broadly unchanged at 2.79 million.

ERF president Siobhán Kinsella said people who lost tech jobs in the past have largely been able to find work elsewhere in the economy, but that was becoming much harder now.

“The last time we had a shedding of IT jobs, it was actually necessary in the economy because government and small-to-medium enterprise were completely priced out of IT talent,” she said.

“But at this stage, people losing jobs are going to have to upskill or cross-skill to go into different sectors, and that’s just not that easy any more. So it’s difficult at the moment.”

Ms Kinsella said she believed the ability of other employers to take on people losing jobs in tech and multinational companies is becoming more limited.

A contract gets a business the skills it needs now without a permanent commitment it might regret in six months

Siobhán Kinsella ERF president

“They are going to stop being reabsorbed because the demand isn’t there in the public sector and in small-to-medium enterprise, and there are going to be longer periods of unemployment,” she said.

She added that fear of redundancies at multinational companies was having an effect beyond those businesses.

“There’s a reticence to make a commitment to a permanent hire because of the nervousness about redundancies, particularly multinationals, and then that impacts down into small-to-medium enterprise,” Ms Kinsella said.

“As soon as you get nervousness in the multinational sector, or the potential for redundancies, you have more people applying to the public sector, and you have a reticence then to make financial or permanent commitments for small-to-medium enterprise.”

The ERF’s report found employers increasingly taking on contract workers rather than permanent staff.

In June, 52pc of recruiters filled contract vacancies, up from 41pc in April, while the proportion reporting an increase in contract placements compared with the previous month doubled over the quarter, from 16pc to 32pc.

“Employers have not stopped hiring. They have changed how they hire,” Ms Kinsella said. “When the outlook is this uncertain, a contract gets a business the skills it needs now without a permanent commitment it might regret in six months.”

However, the chief economist at the Institute of International and European Affairs, Dan O’Brien, said the wider Irish labour market remained in a good position.

“The main negative over the past year has been a 10pc decline in tech jobs, but employment in the sector is still up over the course of this decade,” he said.

“More broadly, the unemployment rate is low, the employment rate is above the EU average, and it would be fair to describe the labour market as being close to full employment.”

Mr O’Brien said the movement between different parts of the economy was not unusual.

“All market economies go through a never-ending process of creative destruction, whereby jobs and industries decline and sometimes die out, while new ones are created and grow,” he said.

Mr O’Brien had been watching employment figures in Europe and the US for evidence that AI was having a significant effect on jobs.

“So far, it is very difficult to see any evidence of a significant impact. AI is both creating and destroying jobs, but in small numbers so far,” he said.

Ms Kinsella said there is uncertainty over whether investment in AI would deliver the expected returns for businesses.

“The period of hiding whether you’re getting a return from it, that window is getting smaller and smaller all the time, and we’ll find out if the emperor actually has clothes,” she said.

The changes in the jobs market come as employers face higher labour costs.

Average hourly total labour costs increased by 17.4pc in the three years to the first quarter of 2026, rising from €33.15 to €38.92 an hour, according to Central Statistics Office figures cited in the ERF report.

PRSI rates for employers and employees are due to rise again on October 1 by 0.15pc.

The national minimum wage increased to €14.15 an hour in January at the same time as the introduction of employer contributions under the MyFutureFund automatic enrolment pension scheme.

Ms Kinsella said the increased costs were particularly difficult for smaller businesses.

“For a small business in a labour-intensive sector, that is often the difference between creating a role and leaving the work undone,” she said.

About the Employment & Recruitment Federation (ERF)

The Employment and Recruitment Federation is a voluntary organisation set up to establish and maintain standards and codes of practice for the recruitment industry. Representing over 200 member companies throughout Ireland, the ERF develops and promotes education and training and provides information and advice on the sector, as well as member services such as vetting and lobbying on policy and industry issues affecting the labour market.

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