Whether artificial intelligence is already replacing jobs remains one of the most fiercely contested questions in the tech economy. The answer, at least for software engineers, appears to be more complicated than many layoffs headlines suggest.
Layoffs May Cite AI, But Hiring Tells Another Story
Tech layoffs reached their highest single-month total in years in May, according to outplacement firm Challenger, Gray & Christmas, and AI was the most frequently cited reason. That has fueled the argument that automation is already displacing white-collar workers at scale.
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Yet researchers at venture firm SignalFire say the hiring data points in a different direction.
“The rationale given for lots of layoffs is consistently AI, and specifically they’ll say AI with respect to code; they’ll say one engineer could do the job of however many engineers in the past,” said Asher Bantock, SignalFire’s head of research. “What we’re seeing on the ground is a little inconsistent with that.”
Engineering Has Proved More Resilient Than Expected
SignalFire’s analysis, which tracks the careers of millions of employees across more than 80 million companies, suggests engineering was the most resilient job function in 2025. Rather than relying on layoffs data, which can be distorted because workers often delay updating their employment status after a job cut, the firm used hiring trends as a more accurate measure of real-time labor demand.
According to SignalFire’s latest State of Talent Report, total hiring across large tech companies fell 25% from 2019 levels. Engineering hiring declined far less, down just 11% over the same period.
The trend was even more striking among the 12 companies SignalFire classifies as “Tech Majors” — Alphabet, Meta, Apple, Amazon, Microsoft, Netflix, Nvidia, Tesla, Uber, Airbnb, Block and Stripe. In 2025, engineers accounted for 55% of all new hires, up from 46% in 2019.
Early-stage startups showed a similar pattern. Collectively, they hired 7% more engineers in 2025 than they did in 2019, according to SignalFire’s data.
Why AI Has Not Reduced Demand For Engineers
If AI were genuinely replacing engineering talent, hiring in the profession would likely be among the first areas to weaken during a broader slowdown in technology recruitment. Instead, engineering demand has remained stronger than many other functions.
Part of the explanation may be that AI tools increase productivity without necessarily reducing workloads. Faster coding can accelerate product development, generate more ideas, and create additional infrastructure requirements, ultimately increasing the amount of technical work to be completed.
That dynamic resembles the Jevons paradox, the economic theory that greater efficiency can increase overall demand rather than reduce it. Applied to software development, the principle suggests that more productive engineers may be able to build more products, features and services.
As Bantock put it, engineers are now “suddenly a lot more productive, and there’s endless work for them to do.”
Executives Remain Divided On AI’s Labor Impact
The broader debate remains unresolved across the industry. Last year, Anthropic chief executive Dario Amodei warned that AI could eliminate a substantial share of entry-level white-collar jobs and significantly increase unemployment within the next five years.
Others within the sector are more cautious. Anthropic’s head of economics, Peter McCrory, told TechCrunch in March that he had not yet observed clear evidence of large-scale AI-driven workforce disruption.
Nvidia chief executive Jensen Huang has also pushed back against predictions of declining demand for software engineers. Speaking at Stanford Graduate School of Business in April, he argued that engineers at Nvidia have become busier, not less relevant, as AI tools become more capable.
“Now that all engineers at Nvidia are using agentic AI, software engineers are busier than ever,” Huang said. While AI can generate code in seconds, he argued, engineers continue to focus on developing new ideas, products and systems.
The Bottom Line For Tech Talent
For now, the available evidence suggests AI is transforming engineering work more than eliminating it. Productivity gains are changing how software is developed, but demand for technical talent remains resilient despite broader hiring pressures across the technology sector.
Rather than making engineers obsolete, AI appears to be reshaping the role itself, allowing teams to work faster while continuing to expand the range and complexity of projects they can pursue.
