Published on the 13/11/2025 | Written by Heather Wright
Sector numbers dip…
Australia’s tech workforce has shrunk, raising concerns over the country’s ability to meet the tech job target of 1.2 million workers by 2030.
The Department of Industry, Science and Resources’ annual report shows a 3.7 percent drop in tech roles, despite overall national employment growing by two percent.
The report says three successive quarters of declining tech numbers indicate a ‘potential ongoing trend’ and states bluntly that the growth target is ‘not met’.
“The trajectory is not on track to reach the target by 2030.”
That 1.2 million target is a joint goal of the Australian Government and the Tech Council of Australia, which TCA reports have deemed ‘critical’ to improving Australia’s living standards, creating economic opportunity for Australians, and ensuring the country doesn’t miss out on productivity gains from technological transformation.
Tech roles accounted for 6.5 percent of total employment in May, according to the DISR report, but the workforce fell from 980,506 jobs in May 2024 to 949,172 in May 2025 – just above the 2022-23 figure of 944,996.
“The measure was not met as the trajectory is not on track to reach the target by 2030,” the report says.
The biggest contributor was a 3.9 percent drop in tech roles across non-tech industries. Tech jobs in technology industries contracted 3.6 percent, which the DISR says was consistent with global trends. Non-technology jobs in the tech industries fared best, declining 3.2 percent.
Industries including energy, healthcare and education recorded increases across the past eight quarters, but the DISR says the tech market ‘aligned more closely with declines in some traditional industries, including information, media and telecommunications, manufacturing and administrative services’.
The target of maintaining the trajectory to meet the 1.2 million job target was the sole measure ‘not met’ in the 17 outlined in the report, with four others, including raising awareness of the importance of STEM, only partially met.
The report notes that technology and digital capability are central to the country’s national interest and have the potential to solve national challenges, deliver well-paid jobs and strengthen international partnerships
“Technology-related jobs underpin almost all aspects of Australian industry and society, including research, advanced manufacturing, transportation, clean energy, healthcare, defence and national security.”
The Australian Computer Society’s 2025 Digital Pulse report suggested the country would have almost 1.48 million workers come 2035.
Despite the decline flagged by the DISR, the technology-related job market is still tracking ahead of the total jobs market growth over the five years since May 2020, at 4.6 percent versus 2.8 percent.
Contracting reset
The pain is being felt acutely by IT contractors with the latest Hays IT Contractor Rates Guide, with 21 percent of contractors reporting their income had decreased in the past year, with 10 percent moving on because of renumeration was too low (the number one cause for moving on was that the contract was not challenging enough).
Government cost-cutting is likely a factor: $527 million of contractor work is being clawed back, and agencies like Services Australia have slashed outsourcing spend. State governments are following suit, prioritising in-house delivery to cut their billion-dollar contractor spends.
While Hays says both project volumes and rates are stabilising, optimism among contractors is low – two-thirds of contractors are neutral or pessimistic about future opportunities.
It shows organisations are increasingly favouring shorter-term engagements and project-based work, driven by automation and AI adoption. While demand for skills like cloud and cybersecurity remain strong, traditional longer-term contracts are giving way to flexible, outcome-focussed arrangements.
It notes a tightening market for generalist roles and shift towards specialist expertise aligned with digital transformation and automation initiatives. Contractors who can deliver in areas like DevOps, data engineering and AI integration are commanding premium rates, while others faced opportunities as businesses consolidate vendor relationships and bring more work in-house.
Political firestorm: ‘A national imperative’
The workforce contraction noted in the DISR report has sparked fierce words on the political front. SmartCompany reports shadow industry and innovation minister Alex Hawke accused Labor of failing to deliver on its tech jobs promise.
“Tech jobs underpin everything from AI to AUKUS; they’re not a nice to have, they’re a national imperative,” he reportedly said. Adding more tech jobs are needed to power the next wave of cutting-edge opportunities.
Betting big on robotics, batteries and AI
The DISR says it has a range of initiatives focusing on the significant ‘supply side’ challenges in ensuring Australia has the workers with the skills to take on tech-related jobs.
Those include targeted initiatives to support the development of skills in emerging technologies, including the Next Generation AI and Emerging Technology Graduate programs, which it says are expected to attract and train over 500 job-ready graduates.
Quantum is also a target with funding for up to 20 PhDs in quantum research, along with STEM initiatives targeted at increasing sector diversity.
On the demand side of ‘supporting a thriving technology-enabled economy and workforce’ initiatives include investments through the National Reconstruction Fund (NRF) and Industry Growth Program, with a focus on critical technologies; implementation of the National Robotics Strategy and grants of $17m for four AI Adopt Centres providing free specialist services for eligible SMEs in NRF priority sectors. Other AI initiatives aimed at ‘capturing the opportunity of AI’ include the development of a national AI capability plan and the work for the National AI Centre.
