Spain's Tech Boom Masks Labor Market Shift: AI Growth Outpaces Traditional Hiring
Spain’s employment landscape is presenting a perplexing paradox: a record high of 22.779.000 employed citizens, coupled with a historic surge of 486.000 jobs added in a single quarter, alongside a record-low unemployment rate of 9.87% – the lowest since 2008. Yet, beneath this seemingly rosy picture, the sector consistently touted as the engine of future growth – artificial intelligence – is experiencing a concerning contraction.
AI Sector Loses Ground Amidst Broad Hiring Surge
Despite the overall economic expansion, the information and communications technology (ICT) sector has shed 48.400 jobs over the past year. This isn’t a systemic tech crisis, but rather a recalibration within a rapidly expanding labor market, where a specific segment is losing momentum. A substantial 192.800 of the newly created jobs – nearly 40% of all positions filled during the quarter – were concentrated in the hospitality industry. Construction followed with 60.000, and retail with 47.400. Conversely, healthcare (-13.900), transportation (-9.300), and agriculture (-6.200) witnessed job losses.
Tech Hiring Driven by AI, But at a Cost
The Spanish economy is demonstrably creating employment in its traditional powerhouses – tourism, the ‘brick and mortar’ sector, and retail – while simultaneously diminishing opportunities within the technology sector. However, the narrative isn't entirely bleak. The burgeoning artificial intelligence sector is actively hiring, accounting for almost one in every eight new jobs. But this growth is not offsetting the decline in established tech areas.
A Gradual Decline in Digital Professions
The downturn isn’t sudden; it’s a gradual, quarter-over-quarter erosion. In the first quarter of 2026, programming, consulting, and other IT activities experienced a 23.400 job reduction year-on-year, resulting in a workforce of 512.100 – a 4.4% decrease. Telecoms followed with a 9.4% decline over the same period. Combined, these activities represent a loss of over 35.000 positions in twelve months. The second quarter further exacerbates this trend. The 48.400 jobs lost are concentrated within the broader information and communications sector, with a 5.6% contraction placing it as the worst-performing sector of the overall economic picture. Over the past year, the number of active individuals in information and communications has decreased by 43.400, while the number of inactive individuals with prior experience in the sector has increased by 14.600. Notably, the tech sector is experiencing a rise in unemployment, increasing by 5.100 individuals to a total of 40.800, pushing the unemployment rate in this sector to 4.8%, up 0.8 percentage points from the average of 9.9%.
Young Talent Bearing the Brunt
Perhaps most concerning is the disproportionate impact on younger workers. A staggering 74% – or 35.600 of the 48.400 jobs lost – were held by individuals aged 16 to 29. BBVA Research has cautioned that the adjustments within the ICT sector aren’t solely attributable to artificial intelligence. While the sector remains 36.6% higher than its levels at the end of 2019, it’s currently 4.7 points below its peak at the end of 2024 – a correction following years of exuberant hiring, not a wholesale replacement of human workers by algorithms. The shift appears to be towards automation of specific tasks and a reconfiguration of skillsets, rather than complete job elimination.