How might the abrupt decline in U.S. job openings and rising layoff rates reshape employer bargaining power and wage growth trajectories across technology versus manufacturing sectors in 2026?
The U.S. labor market is undergoing a structural recalibration that is fundamentally altering the balance of power between employers and workers—but the magnitude and direction of this shift vary dramatically between the technology and manufacturing sectors. December 2025 JOLTS data revealed job openings plunged to 6.5 million, down 386,000 from the prior month and nearly 1 million year-over-year Job Openings and Labor Turnover Summary - 2025 M11 Results bls +1. This decline, coupled with January 2026 layoffs reaching 108,435—the highest January total since 2009—signals a decisive end to the worker-favorable conditions that defined the post-pandemic labor marketLayoffs in January were the highest to start a year since 2009, Challenger sayscnbc +1.
The technology sector has experienced what analysts describe as a "structural reset" rather than a cyclical downturn. January 2026 witnessed 22,291 technology sector job cuts, with Amazon alone eliminating 16,000 corporate rolesLayoffs in January were the highest to start a year since 2009, Challenger sayscnbc +1. Companies announced just 5,306 new hires in January 2026—the lowest January hiring intent ever recorded by Challenger, Gray & Christmas, surpassing even the depths of the 2008-2009 financial crisisHighest layoff total since 2009 recession - The Economic Timeseconomictimes .
The freeze extends across the sector: tech job listings remain down 35% compared to pre-pandemic levels, and Indeed data shows no signs of recovery in the near future2026 Tech Hiring Outlook - IEEE-USA InSightieeeusa . Two-thirds of CEOs surveyed by Yale School of Management indicated they plan to either reduce headcount or keep teams flat in 2026Top firms don't see hiring on horizon in 2026 | LinkedInlinkedin +1. Federal Reserve Governor Christopher Waller captured the prevailing sentiment: "When I talk to CEOs around the country, everybody's telling me…we're not hiring because we're waiting to try to figure out what happens with AI. What jobs can we replace?"Top firms don't see hiring on horizon in 2026 | LinkedInlinkedin
Perhaps the most striking indicator of shifted bargaining power is the dramatic decline in voluntary attrition. IBM's CEO Arvind Krishna revealed that voluntary attrition has dropped to under 2%—down from a typical 7%—the lowest rate in 30 yearsThe Rise of Invisible Unemployment in Tech: 2026 Will Be The Year When Everything Really Changes | SaaStrsaastr . In an industry that historically experiences 13-21% annual turnover, this immobility creates a self-reinforcing cycle: low attrition means companies don't need to backfill positions, which eliminates job openings, which makes workers afraid to quitThe Rise of Invisible Unemployment in Tech: 2026 Will Be The Year When Everything Really Changes | SaaStrsaastr .
European tech data corroborates this pattern, with attrition rates declining to 17.4% in 2025 from the pandemic-era high of 27% in 2022-2023Retention trends 2026: attrition rates data and employee retention strategiesravio .
Employers are exercising their newfound leverage through increasingly strict return-to-office requirements. Major companies including Stellantis, Home Depot, Amazon, Instagram, and Paramount have mandated five-day in-office attendance5-day RTO is the least popular way to work. Bosses require it anywaycnbc . About 34% of U.S. firms now require full-time office presence5-day RTO is the least popular way to work. Bosses require it anywaycnbc .
The shift in worker response is remarkable: only 7% of employees now say they would quit outright over a mandatory RTO policy, compared to 51% who said the same in January 2025Return-to-Office: Workers Back Down as Employers Reclaim Power in 2026 - CPA Practice Advisorcpapracticeadvisor +1. Just 40% would quit or job-search compared to 91% the previous year5-day RTO is the least popular way to work. Bosses require it anywaycnbc . Career experts have labeled this the "Great Compliance," noting that "the era of employee leverage has ended"Return-to-Office: Workers Back Down as Employers Reclaim Power in 2026 - CPA Practice Advisorcpapracticeadvisor .
Workers anticipate this trend intensifying: 74% predict they will have the same or less bargaining power in 2026, 46% expect stricter attendance requirements, and 73% expect expanded employer surveillance toolsReturn-to-Office: Workers Back Down as Employers Reclaim Power in 2026 - CPA Practice Advisorcpapracticeadvisor +1.
Overall tech wage growth is decelerating, with base-pay increases projected at 3.5% for 2026, down from 4% in 20252026 Tech Salary Trends Outlook - IEEE-USA InSightieeeusa . Robert Half data shows even smaller gains of 1.6%2026 Tech Salary Trends Outlook - IEEE-USA InSightieeeusa . However, these averages obscure a dramatic bifurcation:
Winners—Specialized AI and Infrastructure Roles:
Losers—Generalist and Entry-Level Roles:
The tech labor market has effectively split into two distinct economies. Job postings for AI-specialized roles increased 49%, data security roles 30%, and platform engineering 29%Motion Recruitment releases 2026 Tech Salary Guide highlighting compensation trends as AI and specialization reshape the talent marketkellyservices +1. Meanwhile, Salesforce's CEO announced the company won't hire engineers in 2026 "because of AI," and IBM froze 7,800 back-office positions citing AI replacement potentialWhy is the 2026 Tech Job Market So Bad | Tech Resume Writertechiecv .
In stark contrast to technology, manufacturing faces structural rather than cyclical workforce challenges. Approximately 409,000 manufacturing jobs remain open, with 65% of manufacturers identifying workforce attraction and retention as their top business challenge 2026 Salary Trends in Light Industrial Staffing alliedonesource +1. The National Association of Manufacturers reports approximately 415,000 open positions monthly, down from COVID-era peaks but still historically elevatedManufacturing Hiring Trends: And What Employers Need To Know In 2026 (with Carolyn Lee, Manufactu...youtube .
The imbalance is projected to worsen: the sector will create 3.8 million jobs over the next decade, while 2.1 million could go unfilled by 2030 if skills gaps aren't addressed 2026 Salary Trends in Light Industrial Staffing alliedonesource . This supply-demand imbalance gives workers continued leverage even as the broader economy cools.
Manufacturing wage growth remains more resilient than technology. Average hourly earnings reached $36.07 per hour as of December 2025, while production and nonsupervisory workers earned $29.51 per hourU.S. Manufacturing Workforce Data & Benchmarks (2025–2026)us . Total compensation costs continue rising at 3-4% annuallyU.S. Manufacturing Workforce Data & Benchmarks (2025–2026)us .
The Employment Cost Index projects continued increases above 3.0% throughout 2026Plastics Manufacturing Faces Rising Labor Costsplasticstoday . Minimum wage increases in Alaska, Florida, and Oregon will directly impact manufacturing labor expenses, with January 2026 expected to show a notable uptick in average hourly earnings (+0.5% month-over-month) as 19 U.S. states hiked minimum wagesPlastics Manufacturing Faces Rising Labor Costsplasticstoday +1.
Wage growth in 2025 was strongest in skilled and technical positions—particularly maintenance technicians, machinists, and automation specialists—where demand continues to exceed supply2025 Wage Trends and What They Mean for 2026 - Verstelaverstela . Allied OneSource's 2026 Salary Guide documents above-average growth across key roles:
Skilled trade wages now exceed the national average, with mean hourly wages for plumbers, pipe fitters, electricians, and boilermakers surpassing the overall U.S. hourly mean of approximately $31.50Skilled trades gain advantage in U.S. labor marketfinance-commerce . The highest-paying apprenticeship role—elevator and escalator repair—earns an hourly mean exceeding $48Skilled trades gain advantage in U.S. labor marketfinance-commerce .
Hard-to-fill manufacturing roles commanding premiums include maintenance technicians and electricians, automation and robotics specialists, quality engineers, and production supervisors for off-shift operations2026 Salary & Pay Trends: What Candidates Expect in Construction, Engineering & Manufacturing – DAVRONdavron . Candidates increasingly evaluate employers based on shift differentials, skill-based pay premiums, and flexible scheduling models2026 Salary & Pay Trends: What Candidates Expect in Construction, Engineering & Manufacturing – DAVRONdavron .
Unlike technology workers, manufacturing employees with union representation continue securing substantial wage gains. The UAW's recent contracts exemplify maintained bargaining power:
Volkswagen Chattanooga (2026): Workers secured 20% across-the-board wage increases, $6,550 ratification bonuses, annual bonuses of $2,550, first-ever cost-of-living allowances, and job security protections against outsourcing and unilateral cutsUAW Reaches Tentative Agreement with Volkswagen in Chattanooga, Marking Historic Breakthrough for Southern Autoworkers - UAW | United Automobile, Aerospace and Agricultural Implement Workers of Americauaw +1.
Ford, GM, Stellantis (2023-2024): Workers achieved 25% wage increases over four years with 11% in year one, reducing time to top wage from 8 years to 3 yearsHuge news—@Ford and @UAW have reached a new contract agreement. Ford will give factory workers a 25% wage increase over several years, including a 11% bump in the first year. Wages for top assembly line workers increases from ~ $32 an hour to ~ $40 an hour. Ford also will reduce the time it takes for new hires to reach the maximum wage down to 3 years (from 8).x +1.
Daimler Truck (2024): UAW members won 25% wage increases, profit sharing, cost-of-living adjustments, and elimination of wage tiers🧵In April of this year, over 7,000 UAW members won a record contract at Daimler Truck that included 25% wage increases, job security, and—for the first time ever—profit sharing and cost-of-living adjustments. Perhaps most importantly, the deal ended wage tiers that had divided workers for years.x .
Roll-Royce (2025): Workers voted 70.5% to ratify a contract eliminating wage tiers with double-digit wage increases and new profit-sharing based on verifiable numbersCongratulations on a major win! With overwhelming turnout, UAW members at Roll-Royce just voted by 70.5% to ratify a new contract that eliminates wage tiers, secures double-digit wage increases, gets Cost-of-Living Adjustments rolled into base pay for the first time, and creates a new profit-sharing plan based on verifiable public numbers.x .
The UAW committed $40 million through 2026 to support unionization efforts nationwideVolkswagen plant workers in Tennessee to join UAW in historic dealwardsauto , signaling sustained emphasis on collective bargaining as a counterweight to employer power.
Manufacturing employment growth shows strong regional variation, with Sun Belt and Midwest hubs experiencing the most significant job creation:
State | Projected Net New Jobs (2026) | Key Drivers | |
|---|---|---|---|
| Texas | +52,000 to +63,000 | Semiconductors, EV manufacturing | |
| Georgia | +28,000 to +35,000 | EV/battery megaprojects, aerospace | |
| Ohio | +20,000 to +26,000 | Intel chip projects, industrial parks | |
| Arizona | +18,000 to +24,000 | Semiconductor fabs, solar manufacturing | |
| Michigan | +14,000 to +18,000 | EV battery production |
The Fastest-Growing States for Construction and Manufacturing Jobs: 2026 Outlook – DAVRONdavron
This geographic concentration creates acute labor constraints: states with favorable tax credits attracting new manufacturing projects often lack the local workforce to support them2026 Manufacturing Industry Predictionsbdo . Companies are experimenting with unconventional staffing strategies including 3am shift times and partnerships with technical schools to secure first access to graduates2026 Manufacturing Industry Predictionsbdo .
The ManpowerGroup Employment Outlook Survey for Q1 2026 reveals divergent trajectories. The overall U.S. Net Employment Outlook stands at 27%ManpowerGroup Employment Outlook Survey | Resultsmanpowergroupusa . However, tech employers report a NEO of 33%—a 10-percentage-point decline from the prior quarter and 19 points down year-over-year—falling below the global average for the first timeU.S. Tech Hiring Moderates as Employers Prioritize Quality Over Quantity | ManpowerGroup Inc.manpowergroup +1.
Despite the moderation, nearly half (49%) of tech employers still plan to add staff, while just 16% expect workforce reductionsU.S. Tech Hiring Moderates as Employers Prioritize Quality Over Quantity | ManpowerGroup Inc.manpowergroup . The shift is from "volume hiring to precision hiring"—employers are "more thoughtful and strategic," but competition for high-impact talent remains intenseU.S. Tech Hiring Moderates as Employers Prioritize Quality Over Quantity | ManpowerGroup Inc.manpowergroup .
The AI-driven automation wave affects these sectors differently:
Technology: AI is simultaneously displacing workers and creating demand for specialists. Companies facing tariff-induced cost pressures or margin pressure have three options: raise prices, absorb costs, or automate—many are choosing automation as an "emergency response to maintain profitability"32% of Companies Report Layoffs: Understanding the 2026 Tariff Impact on Employmentyoutube . Analysts expect the entry-level hiring freeze to persist through 2026, with the training burden shifting to bootcamps and self-directed learningEntry-Level Tech Hiring Plummets 73% as Companies Pivot to Production-Ready AI Engineers - Second Talent - Columbia Daily Tribunecolumbiatribune .
Manufacturing: Automation is primarily viewed as workforce augmentation rather than displacement. By 2030, the majority of manufacturing task hours are expected to remain human-drivenU.S. Manufacturing Workforce Data & Benchmarks (2025–2026)us . An MIT and Boston University report projects AI will replace approximately 2 million manufacturing workers by 2026, but within the context of 1.9 million unfilled positions projected by 2033How will Artificial Intelligence Affect Jobs 2026-2030 | Nexford Universitynexford +1. The dynamic is characterized as robots "filling gaps and opening opportunities for workers to move into higher paying, more rewarding roles"The Future of Manufacturing: AI, Automation & Workforce Transformationyoutube .
Collaborative robots (cobots) are changing factory floors by working alongside humans, improving safety and output while making facilities more flexibleTop 7 Factory Tech Trends You MUST Know in 2026youtube . Manufacturing employers are increasingly investing in upskilling, with Deloitte recommending an "adaptive build, buy, or borrow workforce strategy"U.S. Manufacturing Workforce Data & Benchmarks (2025–2026)us .
The technology labor market is experiencing what may be a permanent structural adjustment rather than a cyclical correction:
Sustained hiring freezes: Indeed expects "little improvement" in 2026, with unemployment hovering around 4.6%White-collar jobs freeze as companies map out 2026 with fewer workers | Daily Mail Onlinedailymail . Tech job postings have stabilized at low levels since H2 2025 with "no signs...of a return of another boom-bust cycle"2026 Tech Hiring Outlook - IEEE-USA InSightieeeusa .
Bifurcated compensation: Workers with AI, cybersecurity, and platform engineering skills will continue commanding premiums of 7-9%+, while generalist roles face wage compression or outright declinesMotion Recruitment releases 2026 Tech Salary Guide highlighting compensation trends as AI and specialization reshape the talent marketkellyservices .
Reduced worker mobility: With quit rates at multi-decade lows and resistance to RTO mandates collapsing, employers have unprecedented leverage to restructure compensation, benefits, and working conditionsThe Rise of Invisible Unemployment in Tech: 2026 Will Be The Year When Everything Really Changes | SaaStrsaastr +1.
Manufacturing presents a fundamentally different power equilibrium:
Structural scarcity persists: With 2.1 million positions potentially unfilled by 2030 and demographic pressures from an aging workforce, employers cannot replicate tech-style leverage over workers 2026 Salary Trends in Light Industrial Staffing alliedonesource .
Union-driven wage floors: The UAW and other unions have established wage growth expectations of 20-25% over contract periods, creating competitive pressure even for non-union employers in the sectorUAW Reaches Tentative Agreement with Volkswagen in Chattanooga, Marking Historic Breakthrough for Southern Autoworkers - UAW | United Automobile, Aerospace and Agricultural Implement Workers of Americauaw .
Skills-based premiums intensify: Employers are targeting wage increases "where retention risk is highest and where the work is hardest to replace" rather than across-the-board raises2025 Wage Trends and What They Mean for 2026 - Verstelaverstela .
Geographic competition: States competing for semiconductor, EV, and advanced manufacturing investment must offer competitive compensation to attract workers from limited regional talent pools2026 Manufacturing Industry Predictionsbdo +1.
The 2026 labor market is thus characterized by a paradox: the same macroeconomic forces driving job openings down to 6.5 million are producing dramatically different outcomes across sectors. Technology workers face a "Great Compliance" environment where bargaining power has decisively shifted to employers, while manufacturing workers—particularly in skilled trades—retain leverage through structural labor scarcity, geographic constraints, and union representation. For workers navigating this landscape, sector selection and skill specialization have become primary determinants of economic outcomes.