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More than half of hiring managers in tech surveyed by General Assembly said their companies are likely to conduct layoffs within the next year — and workers with jobs that can be replaced by artificial intelligence tools may be on the chopping block, according to a report released April 22.

Those likely to be let go also include those with outdated skills sets, underperformers, those who work on deprioritized projects and those who work remotely, according to the data.

However, 69% said advances in AI tech will lead to new jobs, and more than 3 in 4 tech hiring leaders said “it’s very or completely likely” that employees potentially slated for layoff could be reskilled.

“We’re on the precipice of an unprecedented skills crisis,” Daniele Grassi, CEO of General Assembly, said in a statement. “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.”

AI-related skills dominated the skill sets desired by hiring managers — and the list of skills most lacking among existing talent, the report noted. For example, AI development was the highest-ranked technical skill set for prioritization by hiring managers, and a quarter of those surveyed also said that AI development is the top most-lacking skill for existing talent.

Talent may also be lacking the desired soft skills that hiring managers seek, including adaptability, strategic thinking and problem solving, the report found.

An EY report from 2024 noted that AI would likely lead to both layoffs and hiring. Leaders told EY at the time that they were concerned that it was already harder to find tech talent due to emerging technologies. 

As such, some employers jumped into hiring for AI-related skills, leading to an unsustainable spate of hiring that could increase hiring costs due to higher salaries demanded, a previous General Assembly report said.

However, instability in the tech market may persist regardless, leading to decreased hiring overall. Leaders at both Shopify and Fiverr told employees recently that they would not hire more talent unless teams could prove that AI could not do the job. The CEOs both also pushed for workers to train themselves on how to use AI tools to improve their efficiency, with Tobi Lutke, Shopify’s CEO, saying that AI usage was now a “fundamental expectation” for those working at the company.