As AI reshapes the tech workforce, software engineers face a strange paradox. Developers have one of the most resilient job functions in the industry, yet they’re being laid off by the thousands.
In the age of AI, few jobs are completely unaffected.
Oracle recently cut 21,000 employees, citing “the adoption and deployment of AI technologies.” Earlier this month, Meta eliminated 8,000 jobs as it invests billions of dollars into AI. Managers and software engineers were the most affected.
Still, industry data shows that coders aren’t obsolete yet. Software engineers and developers now account for 55% of all hiring at the largest tech companies, including Alphabet, Meta, Amazon and Microsoft, according to the 2026 State of Tech Talent Report published by SignalFire. That’s up from 46% in 2019, while hiring for designers decreased by 48% and product manager hiring was down 39%.
“The prevailing assumption was that coding assistants would make engineers one of the first major casualties of AI,” Tawni Cranz, operating partner at SignalFire, said. “What you see is that engineering, while it has declined, it’s declined much less than overall hiring.”
The findings come with a major caveat: engineering’s share of hiring is rising because other fields are shrinking more quickly. Overall tech hiring has stalled at 75% of its pre-pandemic baseline, according to the report.
Engineers and developers who keep their jobs aren’t immune from disruption. As companies deploy AI tools such as coding assistants, they can expect more output from individual engineers. These days, an experienced engineer might own a project from beginning to end.
AWS is a major proponent of AI tools for developers. At its annual summit in New York in June, AWS updated its DevOps agent, expanding its autonomous capabilities to include predeployment code review and testing. Developers can leave the agent running over the weekend and check back in on Monday, according to AWS.
The DevOps agent is built to make life easier for developers, Alois Reitbauer, chief technology strategist at Dynatrace, told Channel Dive at the conference. Dynatrace is a long-time AWS partner and is deeply integrated within the DevOps tool.
As developers push code into production more quickly, coding agents are essential for organizations to stay competitive, Reitbauer said.
“If you want to be a leader in your segment of the industry, you have to do it right now, because your competition is doing it,” he said. “You have to be at the forefront, because the technology is developing so fast.”
AI is taking coding jobs, according to Reitbauer — though he said that’s not necessarily a bad thing. As certain developer roles disappear, others are leveling up. Reitbauer says the key is to specialize.
“You don't want to compete with the machine; you want to be the best one using that machine,” he said. “I think a lot of people, especially in development, think the wrong way. They want to differentiate in something that will get harder and harder to differentiate: writing code. That will go away.”
For early career tech workers, the prospect of specializing is particularly difficult when the door into industry is closing quickly. Entry-level hiring at major tech companies has plummeted by 65% since 2019, while hiring at early-stage startups is down over 75%. Industry veterans with 10-plus years of experience are dominating new hires at both startups and tech giants, SignalFire found.
As the traditional career ladder crumbles, new graduates are seeking alternate routes. Students from the top 20 U.S. engineering schools are now twice as likely to be a "founder" than they were at the 2022 market peak, according to the report.
“I think new grads need to be building artifacts and prototypes versus just graduating from the schools and having the skill sets,” Cranz said. “Their ability to demonstrate that they can add value and be a part of these companies is far greater than it was in the past, and I think it's going to become the new norm in order to be able to land a job that you really want.”
The thinning out of entry-level hires could leave a vacuum in leadership. Short-term productivity and cash flow gains from resizing may come at the expense of the pipeline of future staff engineers, founders and tech leaders, Cranz said.
The engineers who survive Big Tech’s AI transition will inherit a changed industry, with fewer peers, top-heavy hierarchies and rapidly evolving tools.
