Cutting corners: The software engineering job market has experienced a significant downturn, with job openings hitting a five-year low, according to an analysis of data from Indeed by Practical Engineer. The statistics reveal a stark 35 percent decrease in software developer job listings compared to five years ago, marking a dramatic shift in the industry’s employment landscape.
This decline is particularly noteworthy when compared to other sectors. While the overall job market has seen a 10 percent increase in listings since February 2020, software development positions have plummeted. This contrasts sharply with growth in areas such as construction (25 percent), accounting (24 percent), and electrical engineering (20 percent).
The software development sector has also experienced very volatile fluctuations in recent years. Job listings more than doubled during the pandemic-era boom of 2021 and 2022, outpacing all other industries. However, this surge was followed by an equally dramatic fall, with current vacancy numbers 3.5 times lower than their mid-2022 peak.
There are several reasons for this decline. Hiring procedures, venture capital funding, and the viability of tech startups have all been significantly impacted by the end of zero-percent interest rates. However, according to author Gergely Orosz, this isn’t enough to explain the hiring halt and layoffs at extremely lucrative Big Tech firms like Microsoft, Meta, Amazon, and Google. Furthermore, the development of generative AI and LLMs might impact the employment market. In a recent survey, 75% of engineers reported using AI coding tools, demonstrating the particular promise of these technologies in the field of coding. Before growing their engineering teams, some companies may be taking a “wait and see” approach, evaluating the possible productivity gains from these tools.
Additionally, Orosz notes that Indeed’s data might not give a full picture of the labor market. It’s possible that fewer software engineering jobs are being posted on the platform, especially by startups and some large tech firms. For example, compared to Indeed’s data, Microsoft’s website lists more software-related jobs. Therefore, although the Indeed data should be regarded as directionally correct, showing a real decline in developer job postings, it might not accurately track hiring trends in Big Tech companies or fully reflect hiring trends in startups. Nevertheless, the labor market for software engineers is changing significantly due to a combination of economic factors, technological advancements, and changing business strategies.
