The U.S. economy added only 50,000 jobs in December, marking the weakest year for job growth since the onset of the COVID-19 pandemic. According to data from the Labor Department, hiring throughout 2025 has been sluggish due to uncertainties related to trade, persistent inflation, and concerns over the impact of artificial intelligence on the labor market. Despite these challenges, the unemployment rate dipped to 4.4% in December, following a period of gradual increases.
In December 2025, private employers added 41,000 jobs, suggesting stabilization despite the weakest hiring environment in four years. According to the Institute for Supply Management, the index for service businesses rose to 54.4, reflecting a positive turn in employment activity. However, the November Job Openings and Labor Turnover Survey revealed a decline of 303,000 job openings.
New productivity data reveals a significant rise in labor productivity, increasing by 4.9% in the third quarter of 2025, as output surged without a corresponding increase in labor hours. According to U.S. government reports, this trend has supported GDP growth while output rises without additional hiring.
Tech hiring remains stagnant, with approximately 1,461 fewer positions reported in December 2025, according to CompTIA analysis. The tech industry saw a slight drop in employment, with tech occupations falling by around 7,000 workers. Despite labor market uncertainty, active job postings for tech roles totaled nearly 380,000 in December, down from the previous month. Notably, demand for candidates with artificial intelligence skills is rising, with job listings mentioning AI requirements increasing by 111% year over year. CompTIA’s findings indicate that while companies are using AI across various roles, 64% acknowledge using it as a cover for staffing decisions such as layoffs.
Overall in 2025, the U.S. economy added approximately 584,000 jobs, marking the slowest growth since 2020 and a significant decline from over 2 million jobs created in 2024.
Why do we care?
What’s changing isn’t outsourcing volume—it’s outsourcing authority. Customers aren’t just buying help; they’re quietly transferring decision ownership without renegotiating the contract.
A lot of companies aren’t hiring because they don’t think they need to. Productivity is up, output is up, and AI is quietly filling the gaps where junior or mid-level roles used to sit. That doesn’t mean work disappeared—it means responsibility moved.
If your customer cuts internal staff and leans harder on automation, guess who becomes the default escalation path when something breaks? You do. If AI makes a bad decision, misroutes a workflow, or creates a compliance issue, it’s not the model on the hook—it’s the operator. That’s often the MSP.
The mistake is treating this as a hiring or margin opportunity. Automation without authority is just risk without control.
On the customer side, spending isn’t gone—but it’s defensive. They’ll pay to avoid outages, fines, and operational surprises. They will not pay for vague transformation narratives while freezing headcount.
So this matters now because the labor market is letting responsibility drift outward without being renegotiated. MSPs that don’t explicitly price, contract, and design for that shift will end up doing more work, with more liability, for the same—or less—money.
This isn’t about jobs. It’s about who owns the consequences when efficiency replaces people.