Software engineer demand drops to 5-year low amid AI advances

Of course, there had been a surge in job openings in the tech industry during the Covid-19 pandemic, meaning the fall now is from a relatively high base. Artificial intelligence is a central factor in this downturn. While AI boosts coder productivity, it also reduces the need to hire additional engineers.

Salesforce CEO Marc Benioff highlighted this shift recently, saying his company might stop hiring engineers altogether in 2025 because of productivity gains driven by AI. "We have seen such incredible productivity gains because of the agents that work side by side with our engineers."

Though increased productivity benefits coders, the AI trend also worries people looking for employment. In 2024 tech startup Cognition Labs announced the launch of the world’s first AI software engineer.

Jesal Gadhia, head of engineering at Thoughtful AI, a firm specializing in AI tools for healthcare providers, says the announcement sparked great anxiety among his employees. Gadhia fears AI may take over entry-level roles traditionally filled by junior engineers. "This group of engineers is becoming increasingly vulnerable."

An engineer designing with AI. Photo from Pexels

Speaking at an event hosted by LetsVenture, Naveen Tewari, founder and CEO of advertising technology firm InMobi, said his company is on track to achieve 80% automation in software coding by year-end, Business Today reported.

"I think my software engineers will go away. They will not have jobs in two years."

"My CTO will deliver 80% automation in software coding by the end of this year. We have already achieved 50%. The codes created by the machine are faster and better, and they fix themselves."

Tewari urged professionals to quickly adapt to this shift, saying AI would disrupt even specialized roles. He cautioned his employees: "Upgrade yourself, do not ask me to upgrade you. Because this is survival. The world underneath you is shifting."

However, despite the hiring downturn, the U.S. Bureau of Labor Statistics said last August that demand for software developers, quality assurance analysts and testers would grow by 17% from 2023 to 2033, significantly faster than the overall job market.

Lighthouse Labs, a Canadian company providing coding boot camps, stated that global demand continues to exceed supply for skilled workers in data analytics, cybersecurity, and cloud computing, driven partly by the rapid expansion of AI technologies.

Regardless of sector, the roles of coders are evolving significantly due to AI. GitLab reported developers currently spend only about a quarter of their work time actually coding.

Madars Biss, a tech writer and front-end developer, predicted coders would increasingly transition from writing code to overseeing AI-generated output. AI tools could "handle much of the routine and repetitive tasks of the developer," Biss told Business Insider, freeing developers to concentrate on "managing, double-checking, and creativity."

In February, AI startup Sensay published what it called the world's first job advertisement specifically targeting a Full Stack Developer (AI Agent), seeking fully autonomous AI capable of independently coding and debugging software.

Sensay’s posting stands apart from typical engineering roles because it explicitly seeks AI software capabilities instead of human engineers.

"This is an exciting moment for Sensay," Founder and CEO Dan Thomson said. "By bringing on board our first AI employee, we're taking a big step toward a future where AI and humans work together as colleagues and collaborators."

In June, Matt Garman, chief of Amazon Web Services, also anticipated significant shifts in developer roles, stating: "If you go forward 24 months from now...it's possible that most developers are not coding."