Australia’s Tech Workforce Shrinks for First Time as AI Skills Gap Widens
Synopsis
The technology workforce fell 0.3% to about 967,000 workers in 2025, the latest Digital Pulse report found, as the industry calls for greater investment in AI skills, training and the next generation of technology professionals.
Australia’s tech workforce shrinks the AI skills gap as the number of people working in technology dropped 0.3 percent to 967,000 in 2025, according to the ACS Australia’s Digital Pulse 2026 report. It was the first decrease in the 12th year of the study’s publication.
The decrease comes after a report that linked the demand for artificial intelligence and automation skills to the shortage of technology expertise.
Australia’s hiring managers felt that 97 percent of them were seeking individuals with proficiency in artificial intelligence and automation, and 88 percent of them found it challenging.
Employment Falls While Technology Demand Grows
Government data also suggest that the Australia tech workforce is shrinking to bridge the AI skills gap. Australia had set to create 1.2 million jobs by 2030, but according to the report by the Department of Industry, Science and Resources, 949,172 posts were unfilled, down 30,000 from the previous year.
The ACS report uses a different methodology than the DISR technology-jobs count. It considers the number of people working in technology jobs rather than the value of technology jobs.
Businesses Face a Changing Skills Market
With the growing technology economy comes the latest Australia tech workforce shrinks AI skills gap figures. Australia’s digital skills economy was worth $476 billion and the technology sector was estimated at $142 billion in the 2025 financial year.
The value of technology exports rose 13 percent to 12 billion dollars. The report also predicts that there will be an additional 259,000 technology occupations needed by 2035.
In fact, according to Digital Pulse, 40 percent of people who started working in technology jobs in the past five years acquired skills outside of the formal education system, including through work, industry-recognized qualifications, and self-paced training.
These figures suggest that two phenomena are taking place at once: on the one hand, technology jobs decreased; on the other hand, employers are in greater demand for specific AI and automation skills.
Source: InformationAGE
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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