US Professional and Technical Services Sector

The 872,305 professional and technical services establishments in the US provide specialized expertise to clients and typically operate as third-party contractors. As opposed to producing a physical product, professional service providers are primarily knowledge-based businesses that offer advice and make available the skills of their employees.

Dependence on Expensive, Skilled Labor

The professional and technical services industry is dependent on highly skilled labor and jobs that command high wages.

Dependence on Government Projects

The US government is a major consumer of professional services, with federal, state, and local agencies serving as key clients across the sector.

Jul 27, 2026 - Companies Rethink AI-Driven Hiring Freeze

• After more than a year of hiring freezes and workforce reductions driven by economic uncertainty and expectations that AI would replace workers, many large employers are beginning to hire again. AI works best alongside people rather than instead of them. The Wall Street Journal reports that companies including Alphabet, CSX, Booz Allen Hamilton, ServiceNow, and Snap-on have recently announced plans to expand headcount in areas such as AI, cloud computing, cybersecurity, sales, and transportation. Booz Allen, whose workforce fell 7.5% year over year to about 30,900 employees after federal contract cuts, said it now needs to accelerate hiring to meet demand. Human resources software provider Lattice says many employers are also resuming entry-level recruiting after realizing AI still requires human oversight and AI-skilled workers. The shift suggests companies are recalibrating expectations about AI's near-term impact on employment rather than preparing for widespread workforce replacement.
• Despite a seemingly strong US labor market, nearly 2 million Americans have remained unemployed for six months or longer, highlighting a growing divide between improving headline job numbers and the experience of many job seekers. The Labor Department reported that 27.3% of unemployed workers had been out of work for at least 27 weeks in June, near the highest share since late 2021 and up four percentage points from a year earlier. Economists say employers remain in a "low-hire, low-fire" mode, with hiring rates largely unchanged for the past two years despite steady job growth and a 4.2% unemployment rate. White-collar fields, including professional services, finance, information technology, and government, have been hit especially hard, leaving many experienced workers struggling to find new roles. Extended unemployment can erode skills, drain savings, reduce lifetime earnings, and increase pressure on workers to accept lower-paying jobs or change careers altogether.
• Remote work is emerging as another headwind for recent college graduates, with new research suggesting it may be reducing entry-level hiring even as concerns about AI dominate the conversation. A London School of Economics study of more than 400 million online job postings found entry-level hiring has fallen more than 14% since 2019, with companies that remained remote after the pandemic cutting junior recruiting the most. Researchers argue that remote work slows learning, mentoring, and skill development, making inexperienced workers a less attractive investment than seasoned employees. Many young professionals also report weaker networking opportunities, fewer chances to develop workplace social skills, and a greater sense of isolation, while some worry remote relationships make layoffs easier. At the same time, surveys from Gallup and Deloitte indicate Gen Z continues to value workplace flexibility, highlighting the tradeoff employers and young workers face between career development and remote-work benefits.
• US employers announced more than 97,000 job cuts in May, with the technology sector leading reductions for the month, according to a report from Challenger, Gray & Christmas. Tech companies accounted for 38,240 layoffs and have announced 123,655 job cuts so far in 2026, a 66% increase from the same period last year. AI was the top reason cited for layoffs for the third consecutive month, with AI-related restructuring now linked to 22% of all announced job cuts. Challenger said companies are acting on AI’s potential to automate work and boost productivity, particularly in the technology industry. Despite rising tech layoffs, overall US job cuts remain well below last year’s levels, down 43% through May after federal workforce reductions drove unusually high totals in 2025. Employers have also announced 80,470 planned hires this year, though hiring remains historically weak compared with pre-pandemic levels.

Industry size & Structure

The professional and technical services sector is comprised of 872,305 establishments that employ 10.1 million workers and generate $2.7 trillion in annual revenue, according to government sources.

• The professional services sector represents 8.1% of the nation's Gross Domestic Product (GDP) and employs 7% of the country's workers.
• The sector is fragmented with the 20 largest firms representing 11% of revenue.
• In addition to employer establishments, the professional services sector has 4 million owner-operated establishments with no employees. Subsectors with the highest numbers of non-employer establishments are management, scientific, and technical consulting services; accounting, tax preparation, bookkeeping, and payroll services (10%); and computer systems design and related services. The owners of non-employer establishments typically perform the work and may outsource support functions like marketing and accounting.
• The professional and technical services sector is forecast to grow its employment base by 10.5% overall by 2033, which is much higher than the national average of 4% for all jobs, according to the Bureau of Labor Statistics.