The tech market is fundamentally fucked up and AI is just a scapegoat

Traditional factories do make wrong guesses about the future and overhire all the time. Example: https://www.google.com/search?q=Ford+f150+lightning+laid+off...

Then came COVID and the economy contracted. As a result the stock market changed to reward profitability. So, excess developers had to go. We are still feeling this.

I do agree that AI is not to blame for this. In fact I will go further and claim that AI is a net negative that make this worse for the employer by ultimately requiring more people who average lower confidence and lower capabilities than without, but I say that with a huge caveat.

The deeper problem is not market effect or panaceas like AI. The deeper problem is poorly qualified workers and hard to identify talent. It’s easy to over hire, and then fire, when everyone generally sucks and doesn’t matter. If the average employed developer is excellent at what they deliver these people would be easy to identify and tough to fire like engineers, doctors, and lawyers. If the typical developer is excellent at what they do AI would be a complete net negative.

AI and these market shifts thus hide a lower level problem nobody wants to solve: qualification.

But I'm curious what people think the equilibrium looks like. If the "two-tier system" (core revenue teams + disposable experimental teams) becomes the norm, what does that mean for the future of SWE as a career?

A few scenarios I keep turning over:

  1. Bifurcation - A small elite of "10x engineers" command premium comp while the majority compete for increasingly commoditized roles                                                       
  2. Craftsmanship revival - Companies learn that the "disposable workforce" model ships garbage, and there's renewed appreciation for experienced engineers who stick around                 
  3. Consulting/contractor becomes default - Full-time employment becomes rare; most devs work project-to-project like other creative industries                                              
                                                                                                                                                                                              

For those of you 10+ years into your careers: are you optimistic about staying in IC roles long-term, or does management/entrepreneurship feel like the only sustainable path?

Software developers are doing R&D, you create new stuff that continues to exist forever. This is unlike most jobs, in which you produce goods and services that are consumed and then you have to produce them again.

What if we are getting to the point where all of the low-hanging stuff is invented? For example, every bank has an app which works and rarely needs to be changed. Or take a social network like Facebook, going from zero to a product with 1B users took a lot of development but since then, it's been mostly static, why employ thousands of developers dedicated to Facebook? Etc.

https://www.wheresyoured.at/the-rot-economy/

This is interesting, in my experience its seemed to be the opposite.

In manufacturing, its must easier to come up with a specific number of employees you need for a given project or contract.

If the contract is expected to sign you may hire early to get ahead of it.

If the contract falls through, or an existing contract is cancelled, you know exactly how many people you need to cut to balance labor with your current commitments.

We can of course discuss how many people got into industry during COVID heyday and whether they should have, but mostly I think it's about those behemoths having disproportionately high impact on the entire labour market.

So in the end you lose both your ability to acquire new knowledge and to keep existing knowledge.

There has to be a better way surely?

Do anything and everything to remain in "growth stock" category. Spend money on useless features, on engineers working on those useless features - as long as it will make your company look like it has bright future and space to grow.

Also, if you are using AI to even write such a simple blog post, then perhaps corporations are indeed using it for all kinds of purposes too, and that undoubtedly reflects on their hiring.

If you are starting a dry cleaning business, you have a cost of the equipment, rent and other well known factors. Starting a tech company in a new and unproven area has different expenses and a different risk/reward profile.

Malinvestment can come in a lot of flavors. Cheap capital will result in too many dry cleaners and also too many startups that probably shouldn't have gotten funding.

The downside comes in various forms. 1) existing dry cleaning businesses are less profitable because of increased competition, and 2) startups hire scarce engineers and drive up wages, which drive up costs for everyone.

Cheap capital is justified bc the goal is growth, but it is a blunt instrument that creates hot spots and neglected areas simultaneously. Compare the approach used in the US with the approach taken by China. Chinese firms face significantly more competition than firms in the capitalist US, but overall China's policies are crafted with a more deliberate eye toward their distributional consequences and notions of the greater good are much more subject to sharp critique and pressure across social and industrial strata.

What we are seeing in the US is that policymakers have come to believe that the growth-focused approach is an escape hatch that can be used to reduce the effects of other bad decisions, but at some point the size of the inflated economy gets big enough that it takes on a political life of its own -- post-911 defense contractors have dramatically more lobbying and policy-influencing power than they had prior. Today, systemically risky financial industry participants have significantly more political clout than they had before the 2008 correction.

In other words, the fabric of (political) reality shifts and it becomes hard to identify what normal would look like or feel like. In my view, AI adds fuel to the existing fire -- it rapidly shifts demand away from software engineers and onto strategists -- give the team a strategy and now with AI the team will have it done in a few weeks. If not, a competitor will do it without poaching anyone from your team.

And market forces include both creative and destructive forces. Firm failure is a feature, not a bug.

Really grateful that the opportunities I've been given weren't predicated on knowing things completely irrelevant to my job. I have spent exactly zero time solving LeetCode problems in my career (beyond algorithm stuff in college).

Firing people in most of Europe is still not as easy as it is in the US.

The opposite is also true, it's not that easy to leave your employer and you have to give 1/3/6 months notice before leaving, depending on your role/seniority/contract.

Sometimes companies even make you sign 12 months notice contracts clause where they pay you a fixed monthly bonus but you can't leave without giving a 12 months notice, my SO has signed one.

ZIRP, AI, over hiring, and a wave of boot camp labour supply I suspect all contribute.

Plus we’re also likely approaching saturation on a lot of fronts with attention and ad density saturation. Things like YouTube seem to be on the edge of how much ads they can force feed without people just not using yt because it’s unusable. Enshitification isn’t a cycle, it’s a one way trip. Combine that with over hiring and it’s bound to hit a wall

Tech changed a lot from 2010 to 2020. Prior to 2010 almost everything built required a huge amount of development effort, and in 2010 there was still a huge amount of useful stuff to be built.

Remember – prior to 2010 a lot of major companies didn't even have basic e-commerce stores because the internet was still a desktop thing, and because of this it really only appealed to a subsection of the population who were computer literate.

Post 2010 and post iPhone the internet broadened massively. Suddenly everyone was online and companies now had to have an e-commerce store just to survive. Only problem was that there wasn't a Shopify or even npm to build from... So these companies had to hire armies of engineers.

Similarly there was no Uber, online banking was barely a thing, there was no real online streaming services, etc, etc, etc...

During this time almost everything had to built by hand, and almost everything being built was a good investment because it was so obviously useful.

Around 2015 I realised that e-commerce was close to being a solved problem. Both in how most major companies had built out fairly good e-commerce stores, and also in how it was becoming relatively easy for someone to create an e-commerce store with almost no tech skills with solutions like Shopify.

I'd argue somewhere between 2010 and 2020 the tech industry fundamentally changed. It become less about building useful stuff like search engines, social media sites, booking systems, e-commerce stores, etc – these were the obvious use cases for tech. Instead the tech industry started to transition to building what can only be described as "hype products" in which CEOs would promise similar profits and societal disruption as the stuff built before, except this time the market demand was much less clear.

Around this time I noticed both I and people I knew in tech stopped building useful stuff and were building increasingly more abstract stuff which was difficult to communicate to non-technical folks. If you asked someone what they did in tech around this time they might tell you that their company are disrupting some industry with the blockchain or that they're using machine learning pick birthday cards using data sourced from Twitter.

I used to bring this up to people in tech but so many people in tech at this time had convinced themselves that the money was rolling in because they were just so intelligent and solving really hard problems.

In reality the money was rolling in because of two back to back revolutions – the internet and the smart phone. These demanded almost all industries made a significant investment in technology, and for a decade or so those investments were extremely profitable. Anyone working in tech profited from those no-brainer technical investments.

Post-2015 the huge amount of capital in tech and the cheap money allowed people to spend recklessly on the "next big thing" for many years. 2015 to 2020 was such an amazing time to be in tech because people were basically throwing money at you to build literally anything.

But time's up now. Companies are realising that a lot of the money they invested in tech in recent years isn't profitable and isn't even that useful. So now they're focusing in on delivering value and building up profit margins.

The tech market isn't broken, it's coming back down to reality. Like railway workers post the boom we must face that most of the core infrastructure has now been built. A few of us will stick around making the odd improvement and maintaining what's already there, but that boom isn't coming back. Many of us will need to seek new professions.

Yes it's kind of obvious to anyone who's looking at the actual work being done: the constant churn of OS updates, the JS-framework-du-jour, apps being updated constantly...

It seems to me like a lot of this is just busy work, as if engineers need to justify having a job by being releasing inconsequential updates all the time. Bullshit jobs anyone?

I for one would really like things to slow down, we all deserve it!

Here is Google complaint about not serving lobster biscue:

https://x.com/Andercot/status/1768346257486184566?s=20

Zero interest rate phenomenon.

“Efficiency” is a damned lie. Enterprise IT is one of the most inefficient spaces out there, full of decades of band-aids layered atop one another in the form of fad products, fancy buzzwords, and “defining leadership” projects. The reason you cannot get shit done at work quickly isn’t because of bureaucracy or management layers standing in the way so much as it’s the vested interest in weakening IT and Ops teams so that those higher-ups can retain more of the profit pie for themselves.

My entire job is to make technology become so efficient that it fades into the background as a force amplifier for your actual work, and I’ve only spent ~1/3rd of my 15+ year career actually doing that in some form. I should be the one making sure documentation is maintained so that new hires onboard in days, not months. I should be the owner of the network and/or compute infrastructure the business needs to operate, not some MSP in another country whose contract you’ll replace with a lower bidder next year. I should be the one driving improvements to the enterprise technology stack in areas we could benefit from, not some overpriced consultant justifying whatever the CIO has a hard-on for from his recent country club outing.

Consultants, outsourcing, and fad-chasing aren’t efficient. They do not better the business, overwhelmingly. AI won’t magically fix broken pipelines, bad datasets, or undocumented processes, because it is only ever aware of what it is told to be aware of, and none of those groups have any interest or incentive in actually fixing broken things.

The tech industry is woefully and powerfully inefficient. It hoards engineers and then blocks them from solving actual problems in favor of prestige projects. It squanders entire datacenters on prompt ingestion and token prediction instead of paying a handful of basically competent engineers a livable salary to buy a home near the office and fucking fix shit. Its leaders demand awards and recognition for existing, not for actually contributing positively back to society - which leads to stupid and short-sighted decision-making processes and outcomes.

And all of this, as OP points out, is built on a history of government bailouts for failures and cheap debt for rampant speculation. There’s no incentive to actually be efficient or run efficient businesses, and this is the resultant mess.

If you want stability, go write Java for an insurance company for $85,000/year in Hartford, CT.

OP is horrified to discover risky gambling happening in Las Vegas.

Amazon is fundamentally a logistics + robotics company and is one of the worst companies to join for 'stability' as they have razor-thin margins.

With almost 1.6M workers, the layoffs there are at least in the 5 figures and they will not stop to do the easiest thing possible in order to increase profit margins and that is to take jobs away from warehouse workers (using robots) and corporate jobs (using AI agents).

> Most engineers (including me) spent months grinding LeetCode at least twice in their career, studying system design, and passing grueling 6-round interviews to prove they are the “top 1%.”

Leetcode can be easily gamed and cheated and is a waste of time.

Now you need to make money for yourself instead of dancing around performative interviews since an AI Agent + Human out performs over 90% of workers doing the mundane work at Amazon anyway.

You are being scammed without knowing it.

ZIRP (especially the "double tap" ZIRP in 2021/2022) created this monster (bootcamp devs getting hired, big tech devs making "day in the life of" tiktok vids).

contractors give:

instant scale up/down without layoff optics

no benefits overhead

no severance obligations

easy performance management (just don't renew)

this mirrors what other industries typically do after large restructuring waves ... manufacturing got temp agencies and staffing firms as permanent fixtures post-rust belt collapse. tech is just catching up to the same playbook.

The actual reason tech companies overhire is because people get promoted based on the number of people that are "under" them. All leaders are incentivized to fight for headcount.

There is huge part of tech market that is just humdrum blue color software. Keep the ERP system running, build a new efficiency report, trouble shoot why the payroll missed bob last week because of a un-validated text entry field.

Or because of the years of zero interest, tons more people went into software, so now it is over-populated, and thus puts pressure on regular hum-drum software jobs.

https://en.wikipedia.org/wiki/Fire_triangle

Pretty much spot on. The UK included in the above definition of Europe as well.

- Senior Engineers now often is sufficient for most tasks, Junior Engineers seems like a burden rather than a boost during development process

- Companies feel comfortable with hiring fast and firing fast

- Tech Market is now flooded with not-so-good engineers having good experience with good AI coding assistants - which already are capable of solving 80% of the problems - they are ready to work for much less than really experienced engineers

In general, yes, companies overhired many software developers, hoping they will continue hyper growing, but then reality has kicked in - this was not sustainable for most businesses.

As far as I'm concerned, the main purpose of IT is to automate work. Tech companies make these systems of automation and provide them to other industries, so they can automate.

Making a program or an IT system is something you only do once. So once it is completed, it is expected that a lot of people who helped make it have to go. It's like building a skyscraper. Massive amounts of work to build it, and when it's finished, most workers have to move on.

Of course an IT company can continue to expand into perpetuity, but what if they don't have the leadership talent or resources to create a new giant project after one has been finished? Then the sensible thing is to down-size.

"Well don't hire too many people in the first place to rush your project into completion" - Then you get left behind.

Most [sane] software out there, but not all, has a main development time which is ridiculous compared to its life cycle (you could code in binary machine code, for several ISAs, it would not even matter).

Then, it is extremely hard to justify _HONESTLY_ a permanent income in software development. Really, really hard.

  > Till ~2010, a layoff was a sign of failure. It meant the CEO messed up.
  > 
  > In 2024, a layoff is a signal of “discipline.” Companies lay off thousands, and their stock price jumps.

There is remarkably little pushback on company narratives about layoffs or ailing economic fortunes from journalists which is weird because it's more normal that they are not truthful.

The Brexit vote is nothing like this though. AI is probably the biggest corporate gaslighting exercise I've ever seen in my entire life.

The LLM proponents are trying the same naive move with intangible assets, but dismissed finite limits of externalized costs on surrounding community infrastructure. "AI" puts it in direct competition with the foundational economic resources for modern civilization. The technical side just added a facade of legitimacy to an economic fiction.

https://en.wikipedia.org/wiki/Competitive_exclusion_principl...

Thus, as energy costs must go up, the living standards of Americans is bid down. Individuals can't fix irrational movements, but one may profit from its predictable outcome. We look forwards to stripping data centers for discounted GPUs. =3

"Memoirs of extraordinary popular delusions and the madness of crowds" (Charles Mackay, 1852)

https://www.gutenberg.org/files/24518/24518-h/24518-h.htm

The point is mass media communication and frictionless money movements across the world and market access which is so freely availible to the small retail investor.

It's a recipe for disaster because an extraordinary claim can attract billions of dollars with nothing but hope and dreams to back it up.

Imagine if the Wright Brothers had today markets and mass media at their disposal, they'd be showered in billions or even trillions but the actual model didn't make any money because it was R&D

Stay away from europe while you can.