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AI fuels tech job cuts regardless of effectivity questions amongst employees
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AI fuels tech job cuts regardless of effectivity questions amongst employees

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Last updated: July 21, 2025 10:48 am
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Published: July 21, 2025
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With information swirling about multibillion-dollar offers for synthetic intelligence startups and multimillion-dollar AI employee salaries, it was a examine from a small analysis nonprofit group that turned some heads within the tech world final week.

Its findings have been easy however shocking: AI made software program engineers slower.

“When builders are allowed to make use of AI instruments, they take 19% longer to finish points — a big slowdown that goes towards developer beliefs and skilled forecasts,” the nonprofit group, METR, which focuses on evaluating AI fashions, stated in its report.

“This hole between notion and actuality is hanging: builders anticipated AI to hurry them up by 24%, and even after experiencing the slowdown, they nonetheless believed AI had sped them up by 20%,” the METR authors added.

The outcomes might merely mirror the bounds of present expertise, they stated — however they nonetheless supply a actuality test for what’s arguably the buzziest a part of the broadly euphoric AI rush: coding.

Prior to now 12 months, AI startups targeted on producing software program code have been the topic of an intense bidding battle that has solely escalated in latest weeks.

On Monday, AI coding firm Windsurf was acquired by one other AI startup, Cognition, after a cope with OpenAI reportedly fell by. Google poached Windsurf’s CEO whereas signing a $2.4 billion licensing deal. Cursor, which additionally focuses on AI code era, was valued at $10 billion in a Could funding spherical that introduced in $900 million. Vibe coding — a method of coding that’s fully reliant on AI — has already grow to be a part of the tech lexicon, and discussions about the way forward for developer jobs might be discovered on most each on-line discussion board devoted to tech.

AI expertise, too, stays in excessive demand, with Fb mum or dad Meta providing multimillion-dollar paydays. LinkedIn discovered that “AI engineer” is the quickest rising job title amongst latest faculty graduates — with two associated roles, knowledge heart technician and system engineer, coming in at Nos. 3 and 4.

The AI gold rush has come as total job openings for software program builders hit a five-year low earlier this 12 months, elevating questions on AI’s accountability for the slowdown.

Among the many most outstanding companies asserting massive rounds of layoffs has been Microsoft, whose CEO, Satya Nadella, has acknowledged that as a lot as 30% of Microsoft code is now written by AI. Bloomberg Information discovered that in a latest spherical of layoffs that occurred in Microsoft’s house state of Washington, software program engineering was by far the most important single job class to obtain pink slips, making up greater than 40% of the roughly 2,000 positions minimize.

Whereas it’s clear that AI can write code, it’s far much less sure whether or not the expertise poses a direct risk to coding jobs within the brief time period.

In a paper launched Wednesday, MIT researchers laid out the “many” challenges that also exist earlier than AI can really start changing software program engineers wholesale.

The primary obstacles come when AI applications are requested to develop code at scale, or with extra complicated logic, the authors discovered.

“Everyone seems to be speaking about how we don’t want programmers anymore, and there’s all this automation now out there,” Armando Photo voltaic‑Lezama, an MIT professor and the senior creator of the examine, stated in a press launch. “On the one hand, the sector has made super progress. We’ve got instruments which might be far more highly effective than any we’ve seen earlier than. However there’s additionally an extended method to go towards actually getting the total promise of automation that we might anticipate.”

What hassle exists within the present coder job market might have extra to do with the broader financial slowdown than with abrupt technological modifications, specialists say.

“Groups are getting smaller,” stated Heather Doshay, a associate at SignalFire, a enterprise capital agency that invests in AI corporations. “Not essentially due to AI, however due to market calls for and working bills. What’s taking place is corporations are asking, ‘How can we keep lean and rent fewer individuals whereas nonetheless extending our runway financially?’”

Nevertheless restricted AI could also be, many coders stay anxious. A well-liked web site that tracks tech layoffs exhibits that the tempo of separations has elevated for the previous three quarters after seeing regular declines over the earlier six — although they continue to be effectively under a 2023 peak. On Blind, an nameless message board app fashionable amongst tech employees, the subject of AI taking coding jobs is a scorching one, with loads of skepticism about whether or not it’s truly taking place — or whether or not the narrative is an excuse that has allowed corporations to chop workers.

Gareth Patterson, a 25-year-old New York Metropolis resident, says he was capable of transition from a gross sales function into an engineering one solely after placing himself by a grueling, nonstop learning routine that got here on the short-term value of most of his social life, to not point out his exercise schedule.

He says the payoff has been price it as a result of his wage now permits him to have disposable earnings in one of the crucial costly cities on the earth.

However he doesn’t envy these making an attempt to interrupt in and even adapt to the brand new period.

“The expectations for an engineer are method up,” stated a senior software program engineer at a tax and auditing agency. “We’re now solely seeing the highest expertise get employed. It’s intimidating.”

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