Firm technology choices shape how firms hire and train workers. Technologically-specific skills also shape how firms compete over workers. To what extent does technological fragmentation create horizontal differentiation among workplaces and drive labor market power? I study this question in the context of electronic health record systems in the healthcare industry. First, I use job postings and a direct survey of nurses to show heterogeneity across electronic health record systems creates meaningful differentiation in the nursing labor market. Nurses report being unwilling to switch technologies and suggest that they would search for a new job or require additional compensation. Next, I show that work experience with specific technologies becomes a meaningful predictor of worker mobility patterns after hospitals adopt these technologies—the friction from switching systems is approximately equivalent to adding 10–15 miles of distance between hospitals. Motivated by this evidence, I extend a discrete choice model of worker labor supply to a dynamic setting by allowing forward-looking workers to gain on-the-job work experience and to move across firms. I estimate the present-discounted value of the technological friction to be nearly $23,000. Technological differentiation makes firms more likely to retain existing workers but less likely to poach workers from other firms. I estimate that this additional differentiation generated an 8.0% increase in markdowns and a 5.2% decrease in wages.