What Happened to Software Engineering?

Michael Faber
Geek Culture
Published in
4 min readMar 22, 2023

Software engineers were on top of the world 2 years ago. What went wrong?

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If you’re a software engineer, you know as well as I do that things are a lot different now than they were two years ago. Tech company stock prices and compensation were as high as ever, and cushy remote jobs were plentiful.

Reddit, Blind, and other forums where software engineers discuss their lives and careers are no longer filled with posts of career switcher success stories, total compensations rivaling surgeons, and excitement about working remotely.

Today, you’ll only find career switchers giving up, job seekers airing out their grievances, news about salary cuts and layoffs, and news about return to office mandates. The waters are troubled, and the future of the field is shrouded in uncertainty. What contributed to things being good? What is currently contributing to things being bad?

Quarantining

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During the pandemic, COVID-19 was killing many unfortunate people, and having many people congregate at businesses every day was only going to make it spread faster. We saw many if not most organizations switch to remote work either because of mandates or as an act of virtue.

Productivity was stable, debatably better. Organizations may have incurred a large upfront cost to get their employees setup to work remotely. People overwhelmingly enjoyed working remotely.

Then vaccines, masks, and social distancing got our COVID-19 numbers under control. The elephant in the room was, what is going to happen to all of this commercial real estate? Organizations have built very expensive buildings and signed very long leases. They were not going to let those investments sit empty.

In some cases, there may have even be pressure from shareholders and cities themselves to return to office. Shareholders want to protect their real estate investments where they can, and cities depend on the revenue from commuters paying for parking, public transportation, lunch, etc.

Interest Rates

https://tradingeconomics.com/united-states/interest-rate#:~:text=Interest%20Rate%20in%20the%20United,percent%20in%20December%20of%202008.

The pandemic was a good time for people and businesses who already had money to make even more money. In 2020–2022, federal reserve interest rates were almost zero. Banks follow suit on these interest rates.

Tech companies had the confidence to experiment and aggressively innovate, because they could get money with practically no interest, all while watching their stock skyrocket. They increased headcount, in many cases hiring people at below the market rate value because they lived outside of the tech hubs these companies are headquartered in. It was a good deal on both ends, because these non tech hub cities have a much lower cost of living.

Today, federal reserve interest rates are between 4.75 and 5.00%, the highest we’ve seen since 2008. Organizations needed to shift to a more conservative modus operandi. Decreasing their headcount to pre-COVID-19 levels was low hanging fruit. With layoffs flooding the market with software engineers searching for a new job, simple supply and demand drove salaries down.

Artificial Intelligence

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OpenAI has shaken with the world with its new general purpose AI models. If you haven’t played with them already, I highly recommend it. You can take a look at ChatGPT on OpenAI’s website.

Today’s AI could hypothetically build a business start to finish. It can handle copy, code, customer service, and just about anything. I can sense the anxiety in the field of software engineering and beyond.

AI is not perfect, but the thing is, it doesn’t really need to be. Your options as a business are now to hire a software engineer with a 1% margin of error for $100k+ a year, or get a subscription to an AI model with a 20% margin of error for $30 a month. Those numbers are made up, but the principle of the idea is the same.

Even if AI cannot translate business ideas into code perfectly, you could hypothetically have one software engineer who leverages AI to build solutions instead of a team of software engineers. These are money saving strategies that businesses will certainly capitalize on.

Conclusion

In the past two years, the software engineering industry has experienced significant changes, with a decline in tech company stock prices and compensation, and a decrease in remote job opportunities. The COVID-19 pandemic initially provided a boost to the industry with the shift to remote work, but the return to office mandates and rising interest rates have had negative impacts.

The emergence of AI has caused uncertainty and anxiety within the industry, as businesses may opt for AI solutions instead of hiring expensive software engineers. As the industry faces these challenges, it remains to be seen how it will adapt and evolve in the future.

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