Software Engineer Looking at Job Market Data

Every week seems to bring another headline about mass layoffs at major tech companies. AI is supposedly coming for everyone’s jobs. Junior developers are struggling to find their first role. And yet, companies are still complaining they can’t find good engineers.

I was caught up in the layoffs that hit the industry in early 2024 and it took almost 3 months to find a new role. I’ve been a software engineer for more decades than I care to admit and I have never experienced such a tough search - interviewing was a full time job and hundreds of applications went totally ignored. It was a scary lesson that things have changed, not for the better, maybe permanently.

What’s actually happening out there? I spent some time digging through the data and talking to people across the industry to figure out the real story.

The Numbers Don’t Lie (But They’re Complicated)

Let’s start with what we know for sure: job postings for software developers have hit a five-year low, down more than 33% from 2020 levels. That sounds terrible until you remember that 2020-2022 was an absolutely bonkers hiring spree unlike anything the tech industry had ever seen.

Everyone seems to forget the period from 2020-2022 was one of the hottest tech jobs market in history. Companies were throwing money around like it was Monopoly cash, hiring anyone with a pulse who could spell “JavaScript”. During COVID, it was super cheap to borrow money, so investors had tons of cash to throw around, and everyone was building for a post-pandemic digital future that seemed to have unlimited upside.

Then reality hit. Interest rates went up to levels we hadn’t seen in 20 years. The money spigot turned off. Companies looked around and realized they’d hired way more people than they actually needed.

So yes, layoffs happened. About 95,000 workers at U.S. tech companies were cut in 2024. What the headlines don’t tell you: most of those cuts weren’t engineers. They were HR, communications, middle management, and other non-technical roles.

Meanwhile, software development roles are still projected to grow 17% from 2023 to 2033 – one of the fastest growth rates across all occupations. The Bureau of Labor Statistics isn’t exactly known for wild optimism.

Why Companies Are Getting Pickier

What we’re seeing isn’t the death of software engineering jobs. It’s the emergence of a skill premium.

Companies got burned by hiring too fast during the pandemic boom. Now they’re being much more selective. The days of getting hired based on a weekend coding bootcamp and a strong handshake are over. The market has fundamentally shifted from quantity to quality hiring.

Candidates are going through increasingly rigorous technical screens, multiple rounds of interviews, and lengthy decision processes. What used to take two weeks now takes two months – if you’re lucky.

But what we are seeing is the role of a software engineer is evolving. AI tools like GitHub Copilot can now write simple code, fix basic bugs, and create standard templates - stuff that used to take engineers hours. This means companies need fewer people to write code, but they desperately need more people who can architect systems, make technical decisions, and guide AI tools toward the right solutions.

This has created a weird paradox: job seekers are finding it harder to get responses (as I lived firsthand), while hiring managers find it takes longer to fill positions than ever before. Companies would rather leave seats empty than hire someone who can only execute tasks without understanding the bigger picture.

Successs doesn’t necessarily mean “the engineers who can code the fastest”. They’re the ones who can plan projects, direct technical efforts, and solve problems that AI can’t handle yet – understanding business requirements, making architectural decisions, and mentoring other developers. If you’re purely focused on implementation, you’re competing with increasingly capable AI tools. If you can think strategically about technical problems, you’re more valuable than ever.

What It Means at Every Level

Junior Engineers: Welcome to Hard Mode

Sad to be a Grad These Days

If you got in before the COVID rush ended, good for you! If you’re a new grad today, I feel for you and worry about what the tight market for new grads will mean for the industry as a whole as people move up and out of the roles they’re not training juniors to replace.

If you’re trying to break into this field right now, it’s tough. Really tough.

The entry-level market is the most challenging it’s been in years. Companies that used to hire bootcamp grads by the dozen are now primarily recruiting from top computer science programs where students have already completed multiple internships. The competition is fierce, and the bar has been raised significantly.

The brutal reality: the bottleneck has moved entirely to that first job. Breaking in is harder than it’s ever been. Many new grads are facing months or even a year or more of job searching. The the counterintuitive part is once you do land that first role and prove you can deliver, the career progression opportunities are actually quite strong. The job market now works like this: getting your first job is nearly impossible, but once you’re in, moving up is much easier.

This creates a concerning dynamic: companies are being so selective with junior hires that they’re creating their own talent shortage at higher levels. The few juniors who do get hired often advance quickly because there’s less competition in the 2-5 year experience range.

Think of the job market like a funnel. The opening at the top (entry-level jobs) got much smaller, but once you squeeze through, there’s more room to move around inside.

The junior engineers who are succeeding right now aren’t just learning to code. They’re building real projects, contributing to open source, and demonstrating they can solve actual problems. They’re treating their job search like a full-time job itself.

Mid-Level Engineers: The Sweet Spot

If you have 3-7 years of experience, you’re in the driver’s seat. Companies desperately want engineers who can contribute immediately without months of hand-holding. You’re experienced enough to be productive from day one, but not so senior that you’re prohibitively expensive.

This is where the “skills shortage” everyone talks about is most acute. There’s massive demand for engineers who understand modern development practices, can work with AI tools effectively, and have experience building scalable systems.

Senior Engineers: More Critical Than Ever

The market for truly senior engineers – people with 8+ years of real experience – has never been better. Companies are realizing that a handful of excellent senior engineers can accomplish more than a small army of junior developers.

But being “senior” isn’t just about years of experience anymore. The demand is for people who can architect complex systems, mentor other developers, and bridge the gap between technical and business requirements. They’re the ones who can look at a business problem and figure out the right technical solution, not just implement what someone else designed.

Staff+ Engineers: Navigating Uncertainty

The market for engineering leaders is more volatile. While individual contributor roles are growing, many companies have been cutting back on engineering management positions. Amazon has been particularly aggressive about reducing engineering managers, and most of Big Tech is reducing Director+ roles.

For senior technical leaders who can wear multiple hats – architecture, mentoring, technical strategy – there are incredible opportunities. The key is being flexible about titles and focusing on impact over hierarchy. And patience, so much patience.

The AI Factor

Everyone wants to talk about whether AI is going to replace software engineers. I don’t see that happening, at least in the way investors want us to think it’s going to happen.

I’ve been experimenting with AI tools for months now, and they’ve made me more productive than I’ve ever been. Not because they write perfect code (they don’t), but because they handle the tedious stuff so I can focus on the problems that actually matter.

Adapting well means treating AI as a powerful tool, not a threat. Using it to prototype faster, explore different approaches, and handle routine tasks. I worry people are going to struggle if they are either ignoring AI entirely or expecting it to do all their thinking for them.

During my own job search, I noticed that the most performant companies increasingly expect candidates to be familiar with AI tools. It wasn’t enough to just know how to code – they wanted to see how you could leverage these new capabilities to be more productive, and they are willing to pay more for these skills.

The Real Story

The software engineering job market in 2025 isn’t broken. It’s maturing.

Gone are the days when any warm body who could write a for loop could expect multiple job offers and unlimited career growth. The market is more competitive, more demanding, and less forgiving of mediocrity.

For engineers who are genuinely good at this work – who can solve real problems, work effectively with teams, and adapt to new tools and technologies – this challenging market represents an amazing opportunity to differentiate yourself. While companies aren’t hiring in volume, this is exactly when you can build the skills, portfolio, and expertise that will set you apart when hiring does return. The engineers who use this downturn to level up will be in an incredibly strong position when the market turns (and I’m old enough at this point to tell you the pendulum always swings back eventually). Companies are willing to pay top dollar for people who can actually move the needle.

The key is being honest about where you stand. Are you coasting on skills you learned five years ago? Are you ignoring new developments because change is hard? Are you more focused on job titles than on the actual value you create?

The market has no patience for any of that anymore. My own experience taught me that even though decades of experience can open doors and get you conversations, they don’t guarantee anything if you can’t demonstrate current relevance and adaptability. But if you’re willing to stay sharp, keep learning, and focus on solving real problems, there’s never been a better time to be a software engineer.

Be Unique in a Crowd

What This Means for You

If you’re thinking about getting into this field: Do it, but go in with your eyes open. It’s not an easy path anymore, but it’s still one of the best careers you can build if you’re willing to put in the work.

If you’re already in the field: Don’t get comfortable. The engineers who are building lasting careers are the ones who never stop learning, who embrace new tools (including AI), and who focus on creating real value for their teams and customers.

If you’re hiring: Stop complaining about the “talent shortage” and start investing in the people you have. The best engineers have options, and they’re choosing companies that treat them well and give them interesting problems to solve.

The software engineering job market isn’t what it used to be. In many ways, that’s a good thing. The gold rush days of easy money and low standards are over. What’s left could be shaping up into a profession that rewards genuine skill, continuous learning, and the ability to solve complex problems. That sounds like the kind of field I want to be part of.