Layoffs.fyi: tech companies have laid off ~137,000 people since January 2024; Indeed.com: software development job postings are down 30%+ since February 2020
Employment for software engineers has cooled as resources shift toward developing artificial intelligence
Context & Ripple Effects
The 2024 cuts followed a prolonged reset: Layoffs.fyi had already estimated more than 150,000 tech job cuts in 2022 and sharply higher reported cuts in 2023. Early 2024 brought 23,670 reported layoffs in January, followed by more than 50,000 cuts by mid-March.
This report matters because it pairs the cumulative job-cut tally with a sustained decline in software-development postings, while identifying AI development as the destination for resources no longer committed to broader software hiring.
First-order effects
- Tech employees affected by the cuts face a weaker near-term market for software-development roles as postings remain well below their February 2020 level.
- Companies shifting resources toward AI can reduce or defer hiring for general software-development work while concentrating staffing and investment on AI development.
Second-order effects
- Tighter software hiring gives employers more ability to be selective in recruiting, while workers must compete for a smaller pool of advertised development roles.
- Budget reallocation toward AI can leave non-AI software initiatives with leaner teams or slower expansion, extending the effects of layoffs beyond the employees directly cut.
Third-order effects
- If this allocation persists, the tech labor market may become more bifurcated: AI-linked roles retain priority while broad software-development hiring no longer tracks the sector's historic growth pattern.
- The sequence from the 2022 reset through the elevated 2023 layoff count and 2024's continued cuts suggests workforce discipline is becoming a recurring feature of AI-era capital allocation, rather than a single downturn's aftermath.
The trend: Tech companies are reallocating labor and hiring budgets from broad software expansion toward AI-focused development, reshaping which technical roles receive sustained demand.