The technology sector has entered a new and more sober phase. After years of aggressive hiring and rapid expansion, many companies now find themselves reversing course. Layoffs, hiring freezes and reductions in force have become common, especially as executives concede that they over-hired during the boom years and now face a contracting economy.
At the same time, the federal sector — traditionally a stabilizing source of technology spending — has seen purchasing reduced or delayed, influenced by both a policy push to shrink government and the disruption and uncertainty caused by the recent federal government shutdown.
For many technology employees, especially those in software engineering, data science, IT, cybersecurity, and federal contracting, the result is a climate of anxiety and unpredictability. Adding to that pressure is the rapid advance of artificial intelligence and coding assistants, which are reshaping workflows and making some roles appear more easily replaceable.
Yet none of this means that individual employees are powerless as they watch co-workers lose their jobs. There are strategic steps that tech workers can take to protect their careers, position themselves for opportunities in 2026, and safeguard their legal rights if they encounter discriminatory or retaliatory treatment along the way.
The attorneys at Potomac Legal Group are here to assist you in safeguarding your career and lifestyle. Our attorneys are skilled and experienced in guiding employees through challenging times. From counseling and guidance to negotiation and adversarial employment representation, our attorneys are here to help. Contact us today to schedule a consultation.
The 2025 Tech Layoff Landscape
By the end of 2025, layoffs and reductions in force in the tech sector will have affected workers at every level — from early-career developers and support staff to senior engineers and product leaders. This wave of cuts looks different from prior downturns. It is not limited to failed startups or unprofitable ventures; major, well-known, and even profitable companies have reduced staff, citing a new focus on efficiency and disciplined growth.
Many employers acknowledge that they hired too quickly during a period of low interest rates and optimistic projections. They point to slower revenue growth, investor pressure, cost-cutting mandates, and, increasingly, the integration of artificial intelligence into development, operations and customer service.
AI is frequently described in company communications as a tool for doing more with less, a phrase that often translates into needing fewer human workers to deliver the same or greater output.
The federal sector technology sales has faced its own shock. Agencies and contractors that rely on federal budgets have had to navigate both the practical effects of a government shutdown and the broader policy agenda of reducing the size and scope of government. Contracts have been delayed, task orders reduced, and some programs restructured or canceled. For tech employees whose jobs are tied to federal systems, cybersecurity, or mission-critical IT services, reductions in force and reorganizations are an unwelcome but very real possibility.
How Tech Employers Will Hire in 2026
Even as they reduce headcount, technology companies are not abandoning hiring entirely. Instead, they are hiring more selectively and redefining what they value in new roles. Looking toward 2026, several themes are already clear.
Employers are increasingly interested in professionals who treat AI not as a core part of their work. For software developers, that means fluency with AI coding assistants and the ability to use them to generate, refactor and test code more rapidly—without sacrificing quality or security. For data and operations professionals, it means using AI to automate repetitive analysis, documentation, reporting and support tasks, while applying human judgment to interpret results and avoid obvious pitfalls.
Companies are also emphasizing the ability to think beyond narrow technical implementation. Candidates who can explain how their work affects revenue, cost savings, risk reduction, customer satisfaction or regulatory compliance stand out. Hiring managers increasingly look for employees who can translate between business and technical stakeholders and who understand that a feature, a model, or a system does not exist in isolation but as part of a broader product and regulatory environment.
Flexibility has become another key hiring criterion. Employers prefer individuals who have demonstrated the ability to learn new tools and adapt to new tech stacks, who are willing to move between teams or projects, and who have experience in hybrid or cross-functional roles, such as engineering plus DevOps, data plus analytics, or security plus compliance. In an environment where roles and priorities are shifting quickly, employees who can retool themselves are far more attractive than those who are fixed in a narrow skill set.
Strengthening Your Position in Your Current Role
No employee can guarantee immunity from a layoff, particularly in a large restructuring. However, there are steps that can improve the likelihood that you will be viewed as essential rather than expendable.
One of the most important skills is to become the AI-augmented version of yourself. If your employer is reorganizing around AI, you do not want to be in the group that resists these tools or ignores them. You want to be identified as someone who uses AI responsibly to produce more, faster, and with better quality. That means thoughtfully incorporating AI assistants into your daily work: using them to generate initial drafts of code or documentation, to propose test cases, to summarize complex technical materials, or to automate routine scripting. It also means critically reviewing the output, catching errors and explaining to others when AI suggestions are unsafe or unwise.
It is equally important to make your value visible. During calm times, quiet excellence might be enough; during rounds of layoffs, it rarely is. Regular, concise updates to your manager about what you are delivering, what problems you have solved, and what risks you have mitigated can help ensure that decision-makers understand your contributions. Taking on projects that cut across teams, such as improving internal tooling, writing documentation that helps others ramp up more quickly, or leading efforts to integrate AI into a department’s workflows, can reinforce your reputation as someone whose work benefits the broader organization, not just a single silo.
Building relationships across the organization is another protective factor. Layoff decisions are not always made by the people who work most closely with you. Leaders from other teams may have influence when RIF lists are prepared, and they are more likely to speak up for colleagues whose work and character they know. Making a point of collaborating with product, operations, security, compliance, or federal customer teams, depending on your environment, can ensure that more people understand your role and respect your contributions.
When Layoffs and AI Intersect with Unlawful Treatment
Even in an economic downturn, employers must obey employment laws. The fact that a company is cutting costs or reorganizing around AI does not give it a free pass to discriminate or retaliate.
Yet, in practice, periods of restructuring can mask patterns that disproportionately harm certain groups. Older employees may find themselves targeted under the guise of “skills mismatch,” even when their performance is strong. Women, people of color, disabled employees or employees from particular national origins may find themselves overrepresented on RIF lists. Individuals who recently complained about harassment, requested reasonable accommodations, took protected leave, or raised concerns about compliance or ethics may see sudden negative performance reviews or marginalization just before layoffs.
Recognizing these patterns is not always simple, particularly from the vantage point of a single employee. That is why documentation matters. If you suspect that discriminatory or retaliatory motives may be affecting your treatment or your layoff risk, creating a detailed and contemporaneous record can be essential. It means carefully recording facts that may be legally significant, such as who made specific comments, when those comments occurred, how your responsibilities or ratings changed over time, and what happened after you engaged in protected activity like reporting harassment or requesting medical leave.
Documenting Discriminatory Actions & Problematic Practices
Appropriate documentation serves two purposes: it preserves your memory of events while they are fresh, and it can help an attorney or investigator understand what happened if you later seek advice or file a complaint.
A useful approach is to keep a private log, stored on your own device or in a personal notebook rather than on company systems. In that log, note the date and time of significant incidents, where they occurred, who was present, what was said or done, and how you responded. If you have previously received positive feedback but suddenly encounter harsh criticism that seems inconsistent with your performance—especially if it occurs shortly after you engaged in protected activity—that timing is worth recording.
When it comes to written evidence, it is important to act within both the law and your employer’s policies. Emails, chat messages and internal documents that you are legitimately allowed to access and retain can be helpful if they show discriminatory remarks, shifting explanations for key decisions, or inconsistent treatment of similar employees. So can copies of performance reviews, goal-setting documents and prior recognitions or awards. At the same time, you should not take proprietary source code, confidential client data, or other information that your employer is entitled to protect. The line between lawful retention of evidence and misappropriation can be nuanced; an employment attorney can help you understand what is permissible in your jurisdiction.
Many organizations, especially larger employers and federal agencies, have formal complaint channels such as HR representatives, ethics hotlines or EEO offices. Using these channels strategically can be an important step. Complaints that are factual, specific and grounded in concrete events are more likely to be taken seriously and can create a record that you raised your concerns in good faith. It is wise to keep a copy of any complaint you submit and to track who responded, whether an investigation was opened, and what follow-up occurred. If your treatment worsens after you complain — for example, if you are excluded from meetings, denied opportunities or subjected to sudden negative evaluations — that sequence of events can have legal significance, particularly in retaliation claims.
How an Employment Attorney Can Help Technology Employees
In this environment, consulting with a knowledgeable employment attorney who regularly advises tech workers can be a critical step in protecting both your career and your legal rights. Ideally, you would seek advice early and before you sign any agreement.
An attorney can review your offer letter, equity grants, bonus plans and any non-compete, non-solicitation or confidentiality clauses. They can help you understand how much leverage you may have, given your performance, your documentation and any potential legal claims. They can also help you evaluate the notice and severance provisions in your contract, if you have one, and how they interact with company policies and applicable law.
If you are presented with a severance agreement, it is especially important to understand what rights you are waiving. Severance packages often come with broad releases of claims, confidentiality terms, non-disparagement clauses and expanded non-compete or non-solicitation language. A lawyer can identify problematic language, negotiate improvements where possible, and advise you on whether the package fairly reflects your circumstances. In cases where there are serious concerns about discrimination or retaliation, the negotiation may become less about accepting a standard offer and more about resolving potential claims.
When internal complaints or investigations are underway, an attorney can prepare you for interviews, help you organize your evidence, and ensure that you present your story clearly and consistently. If matters escalate into proceedings before agencies such as the EEOC or equivalent state bodies, or into arbitration or litigation, your attorney will be your representative and advocate.
For tech employees in federal, contracting or security-cleared roles, it is especially helpful to work with counsel who understands the interplay between employment law, federal contracting rules, agency procedures and clearance requirements. Decisions that seem routine in the private sector can have very different implications when clearances, contracts and government ethics rules are involved.
Looking Forward to 2026
The end of 2025 has made clear that the technology industry is not returning to the freewheeling hiring practices of the past few years. The coming year will likely be characterized by leaner teams, more intense scrutiny of individual performance and higher expectations about how employees use AI and automation tools. Yet this does not mean that tech careers are doomed. It means that the profile of a successful tech employee is changing.
By embracing AI as a powerful assistant rather than a threat, positioning yourself as someone who produces visible and measurable value, building strong internal networks and carefully documenting any treatment that may cross legal lines, you can significantly improve your position.
And if you face a layoff, a hostile environment or indications of discrimination or retaliation, then contact the employment attorneys at Potomac Legal Group to help you navigate your options, protect your rights and pursue a fair outcome.
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