NZ Market & Talent Snapshot

Despite economic headwinds in 2024, the New Zealand IT sector is showing signs of a slow but steady recovery, with projected revenue growth from NZ$7.12 billion in 2025 to NZ$8.52 billion by 2029. While the labour market is heading towards a comeback, there remains an acute skills gap in high-demand areas like AI, cybersecurity, and cloud computing. Organisations are reacting by upskilling existing staff and shifting towards skill-based hiring strategies to effectively navigate a market that is rich in applicants but scarce in specialised digital expertise.

This Week's Key Signals

Generative AI Moves from Copilot to Reasoning Agents, Boosting Organisational Value

Generative AI is rapidly evolving into "agentic AI" systems, moving beyond simple co-pilots to become autonomous team members capable of complex problem-solving. Nearly six in ten organisations view AI as an augmenting or autonomous team member, or even a supervisor for other AI systems, highlighting a major shift in the human-AI collaborative model. While this transformation is accelerating GenAI adoption fivefold since 2023, the limited establishment of AI governance policies means a majority of organisations still struggle to fully trust autonomous AI.

Intel Mandates Four Days In-Office Starting September 1st

Intel announced a major change to its hybrid work policy, requiring employees to increase their office presence to four days a week beginning on September 1st. New CEO Lip-Bu Tan justified the return-to-office (RTO) mandate by stating that it will foster more engaging discussion and drive faster decision-making. This move signals a continuing trend among some large global tech firms to enforce stricter RTO policies, contrasting with the general expectation for increased WFH flexibility.

AI Automation Cited as Key Driver in Major Global Tech Layoffs

Global tech services firms, including Accenture and India's major IT companies, are undergoing significant workforce restructuring driven by AI adoption and automation. Thousands of roles are being quietly eliminated as tasks, from basic data processing to technical support, are ceded to algorithms. This trend demands a new baseline of skills—specifically AI literacy, data fluency, and platform literacy—making continuous upskilling an "existential necessity" for professional relevance.

Gartner Forecasts Worldwide IT Spending to Grow 9.3% in 2025

Worldwide IT spending is expected to total $5.74 trillion in 2025, an increase of 9.3% from 2024, according to Gartner. This robust growth is heavily concentrated in the data centre systems and software segments, driven by server sales that are tripling due to GenAI demand. Despite the strong investment, the reality of current GenAI capabilities is causing CIOs' expectations for the technology to drop, even as their spending continues to surge.

Deep Dive

Shift Left: The DevSecOps Mandate for Continuous Security and Compliance

DevSecOps is now a core necessity, focusing on integrating security practices into every stage of the software development lifecycle (SDLC), a process known as 'shifting left'. This involves conducting security checks and vulnerability assessments, like static code analysis and secrets scanning, early in the build and commit stages. By catching defects sooner, organisations significantly reduce the cost and effort of late-stage remediation while ensuring infrastructure provisioning adheres to secure standards through Policy as Code. Ultimately, DevSecOps relies on collaboration and a security-first culture.

AI Tools: Cloud & Security Focus

Darktrace's Cyber AI Analyst – Darktrace's Self-Learning AI™ delivers adaptive, intelligent cloud security for hybrid and multi-cloud environments, enabling cyber resilience. The Cyber AI Analyst™ automatically triages every alert and conducts end-to-end investigations.

Microsoft Security Copilot – Microsoft Security Copilot is a generative AI-powered security assistant designed to increase the efficiency and capabilities of defenders. It provides actionable responses via natural language prompts to triage complex alerts.

SentinelOne Singularity – SentinelOne's Singularity platform brings AI to endpoint, cloud, and identity protection, emphasising autonomous response and fast remediation. It uses behavioural AI to detect and automatically stop advanced threats like ransomware.

Quick Takes

AI Systems Eclipsing Language Models in Programming Tasks – The latest AI Index Report reveals that in some specific settings, language model agents have begun to outperform humans in programming tasks. The performance scores of AI models on key benchmarks like SWE-bench (programming) have sharply increased by over 67 percentage points in a year.

Microsoft Eliminates Volume Discounts on Cloud Subscriptions – Effective November 1, 2025, Microsoft will remove volume-based pricing tiers for all online services under Enterprise Agreements, requiring large customers to pay the Level A list price. This structural shift standardises pricing but is expected to increase annual cloud expenditure for the largest organisations by up to 12%.

Amazon Invests in SMR Nuclear Energy to Power AI Infrastructure – Amazon is helping to develop one of the US's first Small Modular Reactor (SMR) facilities to provide reliable, carbon-free energy for its cloud and AI services. SMRs offer a solution for 24/7 power, with the first phase of the project projected to deliver 320 MW and create over 1,000 construction jobs.

Featured Profile

You can watch this video on the Impact of Artificial Intelligence on the US Labor Market for more context on the AI and automation trends discussed above Widespread Layoffs Highlight Impact of Artificial Intelligence.