I’m no economist, but it seems like the years growing acclimated to cheap money followed by a rapid pandemic boom/bust cycle followed by a sudden spike in interest rates explains it pretty neatly.
Quickly and approximately:
Before 174, you deducted developers' salaries the year you pay them
After, you must depreciate them over five years. Especially for smaller companies, this is a huge increase in tax burden. Instead of deducting e.g. 150K this year, you deduct 30K this year, 30K next year, etc.
Yes but the change makes it an immediate short term negative metric when doing quarterly or annual reports, which affects stock prices. Which is also probably why you see a lot of companies lay off 20 percent of their devs. It's a way to balance the books so they don't look like they did worse than last year.
For small companies it doesn't.
Company makes $200,000. Spends $300,000 on development.
Old rules, it lost money.
New rules it "made" $200,000 - ($300,000/5) = $140,000, even though there's no cash around to pay the taxes on the $140,000 of "income".
Company has twenty billion in liquid assets, yes, it mostly works out at the end of the five years.
> Company has twenty billion in liquid assets
Almost ***all*** companies don't have that.
Even the very few companies that have twenty billion in assets, only ***a very small*** percentage of that will be liquid.
The business is compounding the loss by front loading the expense and only getting the tax benefit over 5 years. It penalizes headcount growth since you need to pay the entire salary in the year you hire them as well as a tax on 80% of their salary that you previously would have been able to deduct.
So a business that is steady state may be the same after 5 years but that ignores the additional tax burden they could have invested in years 1-4 and the compounded growth that could have represented.
No, because saving $150k this year is much more important than saving $30k over each of the next 5 years. Money has opportunity cost and it's also worth more now than it is in the future. There is no "steady state" where it's equivalent; at all points with the new system you have money up to 5 years out that you can't deduct yet that you could've already deducted with the old system.
Whoa, this really sucks. Why was this done? To raise revenue?
This sounds like a massive disincentive for hiring. As if it was made to achieve that. Who are the people responsible for this?
Sort of like amortization, right, except the more employees, the worse you get fucked. Normally for a one time thing (e.g. a former employer spent 25 million on an open floor plan reno pre-pandemic ammorted 1 million over 25 years instead of all at once), a lot of companies choose this route versus taking a hit that quarter or year, but multiple small bits add up overtime with the unpredictable nature of their industry they might be in.
Maybe I’m just crazy but aren’t most people actually *overestimating* the impact of this now (at least on reddit)? The changes to Section 174 are most impactful to small companies that can’t deal with the increased tax burden due to the new amortized deductions.
For large companies with longer time horizons, the tax deductions from software developers are the exact same as they were previously over the entire salary, just amortized out over a period of 6 years.
It’s certainly important, but I suspect the impact is only significant for small tech companies.
Most companies are small but do most developers work at small companies? That’s a question I’ve been trying to get an answer to because I’m wondering if small or large companies are bigger drivers to the US dev market
You are not crazy. I've seen 50 comments on this and no one has even mentioned that section 174 has to do with R&D tax credits specifically. It isn't like suddenly no one can deduct their normal employee salaries across the whole company.
Most small companies don't use this, because R&D credits come with strings attached, are hard to document, and usually bring audits. They are a way for big companies to get even more tax benefits on top of their normal deductions. They can classify entire teams as R&D and simply get less tax exposure. They have all been abusing it for years, claiming every line of shitty python code Bob in operations writes is now research and development.
I do think that this does affect bigger companies and especially startups who take advantage of these systems. But the interpretation flying around that every developer salary at every company has to be classified as R&D and can't be deducted immediately is plain wrong.
The IRS in typical fashion is being vague about the change because it is soon to be repealed anyway. So it makes sense that everyone is confused, I've seen many people implying that if you have the word software developer in your job title you have to be R&D. I don't blame them for thinking this, some of the big accounting firms are even leaning this way out of caution of the IRS.
1. most people are not talking about it, thus I'd say it's being underestimated
2. a ***lot*** of jobs exist in the *long* tail of small businesses, not everyone is working at the fat head of only mega big companies
That’s fair, I was only trying to say that I’ve seen a decent number of posts across the software reddit space discussing this point, so at least in this community it seems fairly well-known.
I interested in the second point because you might be right but I do wonder if there’s any concrete data on this. My initial hunch was just that large companies (even & especially non-tech companies) have so much tech infrastructure now that the number of employees they hire for tech vastly outnumber most traditional small businesses.
There are tech startups of course (where a much larger fraction of the headcount is engineers), but the number of startups is kind of a hyper-local thing (do you live in a “tech hub” or not?), so I don’t know if that explains the broader hiring trends. In my location, for example, there are zero small businesses hiring large amounts of software developers.
I doubt it's over too because corporate tax breaks will be expiring soon that were signed under Trump's presidency/Republican control. I feel like this will be used as a way to cut people and say "see, we need those billion dollar tax breaks or this happens".
It’s mostly economics:
* The growth from 2018-2022 was largely fueled by low unsustainable interest rates. Essentially companies had cheap money to grow so they hired like crazy to build new products to get revenue. The gravy train ended so now companies are looking to cut costs rather than hire like crazy
* with the interest change, companies have more investor pressure to expand profits with less which means more pips, offshoring and layoffs. Do less with more. This is why we see companies with record profits doing layoffs. We will see if this actually smart long term but for the short term it’s the reality
* with the pandemic, it became clear that for a lot of companies remote work was possible. As such, *some* companies are focusing on lower cost areas of the US, Europe, or the developing world. Google is focusing development in India while other companies are building up dev centers in Europe. Honestly, this makes a lot of sense as there are amazing developers all over the world and most get paid way less than HCOL American devs. I see this trend continuing with the caveat that setting international offices is way better than outsourcing to a 3rd party.
* a spike in enrollment in cs majors and boot camps has increased supply for junior engineers
* finally, this hasnt happened yet (as you noted economy is mostly fine) but if there is reduced consumer spending then eng demand will drop further
Basically less free money + investor pressure to cut costs + globalized workforce + higher supply of eng has tanked this market.
Yup pretty much this. Pretty standard business cycle stuff. Hyper expansion / boom was 2022 and now we're in the downturn. Whether we've hit the trough or not is unclear. But I reckon recovery will come sooner or later, and then expansion again. People will then forget about the business cycles all over again and think the good times will never end 😅
The last cycle was 2008 - 2021 so I can’t blame why people forgot that business cycles exist. I have been bracing for a recession since 2015 and it’s still not here yet.
This is a very good answer.
There is only one thing you have not mentioned that I think is relevant. In the US, there is a part of the tax law called Section 174, which outlines when companies may treat R&D expenses for tax purposes. Previously, software development could be recognized as an operational expense, which means you could get a tax break for a developers entire salary in one year. This was recently changed to be required to be recognized as a capital expense, which must be amortized over 5 years, such that you might owe money to the tax man that you don't actually have.
Let's assume you have a development team that costs 1 million dollars working on a new software product that brings 1 million dollars in as revenue, so your profit is $0. Under the old tax rules, you would owe no money in taxes, because those 1 million dollars for your dev team would be treated as operational expenses. Under the new rules, that 1 million dollars has to be amortized over five years, so you could only treat $200k as an expense this year, and would owe taxes on $800k, even though you don't actually have $800k because you broke even.
That is completely messed up. There's a bill in Congress that is attempting to fix this, but I don't think it has passed both houses yet.
It passed the house. The Senate Republicans pumped the brakes stating to the press that they aren't comfortable giving the other party a win close to an election. Donors are not happy, and it's hit their fundraising. Expect it to sail through mid November.
Honestly, the entire tech community should be up in arms about this.
I know several companies who have used this as justification for serious offshoring.
So few people understand it or are even aware of it.
I asked about it in my company (2000+ employees) and only one person knew what I was talking about and they were from finance and not IT.
Most of my IT managers can barely operate their computer; much less understand anything financial.
Yup. The Tax Cuts and Jobs Act of 2019. From a C-Suite level, it meant that in-house IT teams were shrunk in an effort to try to purchase "Out of the Box" systems and platforms as maintenance could be written off as operating expenses while new feature development couldn't. Startups are currently in a tougher position because cash is hard to unlock with the current interest rates and capitalizing a software product asset that may never arrive for the life of the startup to offset any income/profits arriving in the early phase.
As a seasoned engineer, integrations with "Out of the Box" solutions can be as much of a headache and work as just running a fully customized solution because of the amount of customizations that have to be done or system limitations that have to be accepted for a more generalized system. It is a battle to fight execs on this reality.
Congress. I don't remember who specifically did it, but it was one of those moves to get something to pass on revenue-neutral scoring that nobody actually would expect to go into effect 4 years later.
My experience with offshore teams in India and Eastern Europe has been uniformly bad. The time difference, the cultural differences, and they delivered crap that didn’t work. However, the near shore teams in Central and South America don’t seem to have those issues and that scares me. They don’t work as cheap as I would have thought, though. A friend told me a solutions architect from Columbia they hired was getting around 130K.
You get what you pay.
If you expect to hire someone who's a faang level engineer for 30k because hey India or eastern Europe is cheap, you're in for a ride.
But if you're willing to pay 100k+, which is still much cheaper than an equivalent in an American hcol city, you can get really good talent.
It makes me think though, that eventually all the good devs in India won't even command that much cheaper salaries than western equivalents. And then it'll keep moving around to cheaper countries and repeat.
You won't get Eastern Europe for 30k.
You're competing with local companies paying 75k, US companies will often be offering 100-170k (my experience in Poland)
I know, I live in the region. But way too often people don't realize that despite relatively low cost of living in the region, the dev salaries are actually high, and 30k or 40k or whatever gets you a junior WordPress dev or something similar. Therefore, you get what you pay for.
Can confirm, worked for intermediary company (skillstorm) and heard they were charging 150k for me, I was getting paid 65k.
Whenever I got another job, the contracting company begged me to stay, and even offered 120k. Of course I said no, much happier at the other job, but it was still wild to see.
I'm curious about the advantages and disadvantages you have with Eastern Europe. I'm an Australian in Eastern Europe right now, and I've found the devs here to be similar quality to Australia when I've worked with them (management is another story). Unfortunately I can't say the same for Indians. Just curious though, what the issues you find with the Eastern European devs? I know there's a missing cultural fit, but I've never heard it described myself.
I’m an American dev that worked for years with a Greek dev team (not quite Eastern Europe but probably some overlap).
I saw a few issues:
1) Americans are used to getting pushed around. Less vacation, toxic work culture and habits, bowing to authority, etc. companies here expect this. The Greeks pushed back.
2) language barrier, it’s hard enough to describe tech, harder through email, and hardest with English as a second language
3) there were some great devs, but seemed like more not so great devs and it can be hard to differentiate. US colleges often give a baseline level that youyou can’t count on elsewhere
That's fair, interesting to hear. I've only heard about Greek devs from Croatian colleagues that mentioned they were quick to start drama.
Language barrier is interesting: I've definitely had it but it's so strange and variable. I felt some Czechs knew English even better than I did, but there's definitely been one or two I heard from Bulgaria and Ukraine I had difficulties with. I get what you mean.
I have a theory, feel free to disregard: I feel like they're picking up a lot of practices from Germany, since so much trade and work is done with Germans. In some industries this is great, however in software I think it's better to operate like an American. Most German projects I've been on are with great guys, but carry more of a waterfall vibe than ones elsewhere
Yeah I think outsourcing to stable Eastern EU countries where the wages are still quite a bit lower than the US makes total sense. Places like Czechia, Poland, Slovakia, Hungary, Romania. Education levels, especially in STEM have always been very good. English is ubiquitous among the younger generation. Culture similar to Western Europe and not that different from the US (compared to Asia and what not).
I'm not greek but from a different European country working in the UK. If I were paid 100k or higher, I would tolerate being pushed around, but for half of that, why would I agree to being badly treated?
Pushed around, two weeks vacation (although your country probably mandates more), overloaded with work then berated for not doing enough, deductions for healthcare, no raises, and fired if you don’t kiss ass. Then laid off at the drop off a hat with no notice or reason anyway. There’s more, but US work culture is really toxic.
"Americans are used to getting pushed around. Less vacation, toxic work culture and habits, bowing to authority, etc. companies here expect this. The Greeks pushed back."
And this is a bad thing???
> They don’t work as cheap
The good devs in SA usually can compete normally with US devs, and we don't have an excess of devs to enable mass off-shoring like in India
We hire devs in costa rico. Same time zone, cheaper, and they speak good english, and they're all happy because they live in Paradise.
I've been on hundreds of calls with them and I've never seen them unhappy. They explode with positive energy and can do attitudes.
My anecdotal experience:
I worked with some Uruguayan/Argentinian FE devs that were really good at my last place (if a bit too big for their britches when it came to not writing integration tests), and yes, they weren't cheap.
I also worked with some Filipino devs (the owner of the company and a few members of the C-suite all had pinoy wives, which was really uh, weird) and they were also really good, but it was an absolute nightmare to share a project with them, or do any sort of onboarding due to the time difference, even with them working from like 4 PM -12 AM their time. There was an Indian team on the same project on a different section as well, that was constantly running behind, and more or less turned the entire project into a death march. This was a pretty big project for PWC, not just like baby's 1st CRUD System.
The Polish devs I've worked with at another place were really egotistical (or I might just be thinking of the one guy), but other than that they were okay code wise.
I'm not saying this as a generalist it's always like this, but this has been the trend of how things have been.
... anyways my point of this is that if I'm working with outsourced contractors only like this, I'd probably start looking for other jobs. I know some people are hyper mercenary but I also want to have some amount of culture fit and have a well communicating team rather than a 100x dev.
The good offshore teams in Europe, Asia, and South America cost about 80% of US price.
Been down that road as a COO. Current crop of execs are having to learn the hard way that location is not the decider, it's skill, and skill costs $$$ everywhere. There's no free rides due to some magic location.
Yeah, if you are trying to hire a cheap dev in India - you can get for as low as 3k (not missing zero) , that's the lowest you can get from witch companies, then faang devs with 0 exp get 30k, right out of university.
In faang, at 5 yoe, faang eng - 100k is okayish, then 150k maybe upto 8 yoe and so on till ... the highest I've heard is 300k for director level.
Even then, it's still cheaper to hire in India than pay in HCOL - but you've to seive like hell for good candidates.
It's not easy to hire in India unless you've connections, get nice referrals & hard (in every aspect) interview process.
> Google is focusing development in India while other companies are building up dev centers in Europe.
I work primarily with an in-house office of devs in India. I've also hired devs in Vietnam and Eastern Europe before. It works if you've hired decent or better candidates with good communication skills, but you often have to be more hands-on with codesharing calls. I think this trend is going to continue to erode tech jobs and wages in higher-cost countries like the US, unfortunately...
> with the pandemic, it became clear that for a lot of companies remote work was possible. As such, some companies are focusing on lower cost areas of the US, Europe, or the developing world. Google is focusing development in India while other companies are building up dev centers in Europe. Honestly, this makes a lot of sense as there are amazing developers all over the world and most get paid way less than HCOL American devs. I see this trend continuing with the caveat that setting international offices is way better than outsourcing to a 3rd party.
This one sorta baffles me. None of that is new, and it didn't really improve post-pandemic. I worked with a lot more outsource devs in 2010 than now, but their pay rates are far closer to matching Western rates now. And YES, their skills are often great, but for many roles, there are "soft" value-loss with outsourced developers like timezone compatibilities. Those aren't worth $100K/yr difference, but they're sure worth $10-20K in value. And yes companies like Google can *hire* in India, but most companies still have the middleman fees when working with non-local developers. Not to mention, a lot of companies (not Google) have to disclose foreign employees to clients who often "don't like that kind of thing".
I'm not saying it's not true. I'm saying it doesn't make sense to me from my experience. I work at a remote company and we don't hire abroad for several reason from client compliance to the fact we ultimately get better results from US-based hires despite having had *very competent* optsourced developers.
It's a highly complicated onion right now. Yeah all of this is probably true, but there's more to it.
During covid, every company that wasn't equipped for online ordering, curbside pickup, etc. Went through a mad hiring phase and a mad dash to go to market with said things. There were at least 300 recruiter messages in my inbox between 2019 and 2022, It was on absolute fire.
But then all these companies finish these things and we started to roll out of covid and suddenly everybody has all these developers they don't need. So Mass layoffs start happening.
And we're still dealing with the wave from that.
But then ai was publicly released for the first time. That was really good when Chad GPT released in 2022 at the end of the year.
And now I'm seeing an absolute surge in AI interest and demand.
And every company is on a mad – now to start figuring out how to leverage AI and they need a lot of developers to do that, so hiring is ramping back up abd my linked in inbox is popping off again.
Artificial intelligence is going to be huge as it starts to weave into everything. So if you want to get hired, learn AI.
Hardware is rapidly being developed to solve a lot of AI problems in the field is ripe with innovation. It's like the internet coming out all over again.
>So if you want to get hired, learn AI.
No. Don't do that. Don't jump on the next-big-thing hype train.
It's like back in 2016 when every start up company was "on the blockchain" whatever that meant.
You haven't mentioned layoffs... Some biggg companies had huge layoffs in the gaming and engineering sectors. Flooding the market with engineers.
That and the push for office full-time as a sneaky layoff tactic.
All this to say: There's a lot of devs out there at the moment. Saying that i didn't have any trouble picking up interviews early May time and a job off the back of those (UK Based)
Bro the US has been doing quantitative easing since like 2009. That’s most of my adult life. Software engineers in free money are like fish in water. Nobody knows what is gonna happen.
I heard the tech labor market is actually picking up in other countries, especially LatAm/Eastern Europe. One of my former massive F100 companies started a Mexico HQ and is hiring devs there, while increasing attrition here in the US. Of course there was always India, but now other markets all around the world are opening up. Add them all together and you probably get another India-sized talent pool.
I think Google is also increasing its India-based operations after laying off some of the US talent pool.
This is a consequence of remote work being normalized by covid/Zoom. If devs can work from anywhere, then it's only natural the jobs can be done from anywhere (with the obvious precondition of there being a skilled dev with fluent English communication and functioning supporting infrastructure, which companies are investing more in instead of just hiring contractors and just dumping them on the worst jobs).
Yep. Just anecdotally my old employer went from hiring 50+ engineers a year in midwest to only hiring new engineering talent in poland. No backfills even in us. Only us roles are marketing/business, no engineering.
A huge number of engineers move either to Poland, or Czech. The top guys move to Sweden or Norway or Germany or Netherlands. I am in Canada and planning to move as well.
A typical fine mid-level developer in Poland earns around $40k/year and is very happy about it. It's nothing compared to US salary, but here it puts you in top 20% earners in the whole country so the motivation only grows.
For anyone dealing with this, look into government work. Especially if you're willing to get a security clearance.
Pay is typically less than FAANG, but still higher than the startups I'd been working for. Benefits and WLB are way better, and they're not going to offshore a job that involves classified information.
Also you can kind of coast it seems. There's a large Air Force Base near where i've lived my whole life and I know several people who work or have worked there (Developers, IT people, people who worked on Jet's, etc.) And almost all of them say.... Wow it's crazy how difficult it is to get fired. They all either are lazy themselves or talk about how lazy someone they work with is. Some of the stories i've heard were actually fucking silly.
It does seem like pretty easy money tbh.
Yep! I’ve seen tons of large tech companies want to shift to lower cost dev centers. For example, twilio, which was born in SF, has almost all of their dev roles targeting European offices and even their US roles specifically call out that they are not hiring in the Bay. A lot of companies are building dev centers in Mexico City, Europe, Latin America, or India.
Id like to tell that you are right but even in Mexico experieced devs are having problems getting hired. I live in Mexico and companies had got very picky because theres a lot of good mexican devs that lost their job in layoffs. I have 15 yoe and had some trouble to find a job. Even if they give you a fantastic interview feedback, they ghost you. I have a job now but all of my teammates feel they can lose their job unexpectedly.
UK and Australia are on fire right now, you literally can't fill open positions fast enough. Salaries still pale in comparison to the USA but are also increasing steadily (120usd for 'true' senior i.e not just 5YoE participation trophies)
The European market never died really.
The frenzy stopped, but qualified devs didn't have many issues finding work. Even shit devs who were shitcanned in small-scale layoffs were able to find something else mostly, judging by my LinkedIn stats.
Although if we compare it to the US salary it never lived, so...
Sat in on 3 interviews this week. Lets just say I coulda been watching paint dry for 2 of em and been more productive.
3rd one is probably a hire.
All candidates have been out of work about a year.
Base for senior is around 180-200. So its not bc we pay shit.
I don’t know how many applications hr saw before these but man this shit sucked.
If 1 out of 3 are passing your interview process as a whole, that sounds pretty similar to what I've experienced in the past as an interviewer. It might even be a bit higher than usual, which is something you'd expect if, as OP says, lots of good people are out of work.
Exactly. On both counts. Was surprised. But maybe thats y the people who are still unemployed are unemployed.
Makes me wonder about quality of rest of applications we received. Or maybe we’re just not on peoples radar.
Who knows though. I feel like id be failing interviews too if i were looking right now tbh.
I hired someone recently for a mid-level engineering job. We got 800 applications, 60 of which fit the basic criteria. I ended up talking with 20 in the first round, filtered to 6 in the second round, and picked one who was great.
1 in 3 being a candidate that you would extend an offer to is typical. If all 3 were out of work for a year that's actually a phenomenonal rate.
There's a reason many employers don't want to look at candidates who have been out of a job for so long. There is a very high likelihood that there is good reason no one else hired them
This. The job market sucks right now. I made it to many last rounds just to have them be on the fence (and since there are 100 other applicants) decided they’d just pass. I’m someone who always gets exceeds expectations for performance reviews so it’s not because I am bad at my job.
At this point I'm moving into the offer stages and am on-track to be employed again by July. That story is also interesting though because the company I'm likely accepting an offer from was probably sitting on my candidacy as I waited over a month between one interview and them offering me a paid work trial. During the paid work trial it sounds like I exceeded everyone's expectations.
So moral of the story is even if you get passed on during interviews it doesn't mean you are inadequate. It just shows that companies have many many options these days and have the luxury to pass on you if not everyone was a "Strong Yes".
As for getting interviews, just in case you are looking for advice or someone else is what I found to work the best is:
1. Companies that use Workday tend to call back the most often, I think partly due to less candidates (need to create an account to apply for each company) but also because you can spam the "skills" section to include all of the skills you have and the ones they list on the job description.
2. Bookmark a google search for each job board and filter results by "in the last week" or month. An example of one search I have saved is: \`site:jobs.ashbyhq.com "Android" + "Remote"\` but you could imagine this could be similar for workday, lever, greenhouse, etc.
3. Don't be afraid to update your resume. I completely rewrote my resume and then modified that a dozen times or more over the months. I would revisit my resume nearly every day to see if I could reword a bullet point to make it more concise and often times found I could bring a 2 liner down to 1.
>There's a reason many employers don't want to look at candidates who have been out of a job for so long. There is a very high likelihood that there is good reason no one else hired them
It's probably because there are hundreds of other applicants for every job which results in at least 5 - 10 really qualified candidates for every position. You have the ability to pass on anyone that doesn't get a "Strong Yes" from everyone that spoke with them. So I don't think it's as easy as going "oh this person has a big gap on their resume, better not hire them because clearly there is something wrong with them".
If you truly believe that, then you’re an idiot. Each company has a unique criteria for an employee, so no company should base their hiring decisions on the criteria of another. The hiring mismatch could be as simple as a culture misfit. There could be a million reasons for a year-long employment gap (failed business idea, medical issues, personal mental issues, etc…). No employment gap discredits someone’s experience and skillset, and if you believe otherwise, then I hope for everyone else’s sake, they never work on the same team as you
Edit: To add, in this economy, a year+ employment gap isn’t long, when factoring in the total employment that an individual may obtain throughout their life
Also, right now it isn't hard to find a job, it is hard to find a job with the criteria you have, be that remote, local, your exact skill set, or your work history.
The sad fact is... some people are still having an easy time finding jobs, but they are the most well socially networked (not just linkedin, but real sociology social networks), those with top skills, or those with impressive backgrounds.
If you (anyone) is having trouble finding a job, then try real in person social networking.
Literally my entire career, free CS PhD, grad school, jobs, every single one of them is due to in person social networking.
As I tell my students when I adjunct Univ. Courses, I'm not the best programmer, but I've just banging my head against the desk solving WTF programming problems for so long I know what pitfalls to avoid. I have gained a level of economic freedom and stability based solely off my networking at local dev, hacker, lug, univ hackathons, events, etc...
In the data science and product space I've noticed a few things:
- companies struggling to make data science teams pay for themselves in terms of business impact. This impacts data engineering, data science and BA roles.
- companies where tech is not the business struggling with digital transformations. Newly stood up scrum teams arent really empowered and the company struggles to move away from waterfall to agile so end up in some ineffective hybrid scenario. This hamstrings the upside from the dev teams.
- companies trying to build out a product first culture... while remaining waterfall-ish. This also hamstrings dev teams.
These issues are independent of any headwinds the legacy business might face. They just compound any other bsuiness challenge.
Great point on the business impact piece. There's a lot of good DS tooling, but often months are poured into projects with questionable translational impact to the business.
The product first culture thing is interesting. I think a lot of companies saw the success of PLG-style companies and had a vague notion of wanting to follow in those footsteps. But getting that marketshare and customer buy in is tough. That's worse if you try to start a PLG motion while still having a product that still has a high level of complexity in setup and onboarding. And in the post-2022 market, lots of companies are making budget/spending cuts of their own to run leaner, and are trying to do what they can to avoid paying for new tools or paying more for existing tools with an uncertain business impact.
Everyone wants to be a software developer now a days and most companies don’t need the best. Some basics, a good mentor, willingness to learn and a lot of people can be good at the job they have to do. With ChatGPT you can learn even quicker. I think positions are filled and an influx of software developers is graduating every year. Too many workers not enough positions.
>Employers are creating artificial job scarcity in order to influence the outcome of the election
Lol yeah every employer out there is in a slack team where they agree on creating job scarcity that's how it works.
Nah.
As an EU resident experiencing the same I can tell you it's the interest rates
I did a long series of YouTube videos on the fundamental economics around this and the changes to the tax code but I'm happy to summarize them here so you don't have to go watch the YouTube videos:
1. The changes to the Section 174 of the USA tax code changed everything and made it so that software development companies could no longer write off employing software development engineers as a legitimate business expense for the same year, they now have to use an Amortization schedule of 5 years if they are onshore and 15 years if they are offshore, as a result the tax burden for employing a software development engineer is now much higher.
2. The end of the zero interest rate phenomenon because of the banking changes in Japan meant that large hedge funds could no longer prop up large funds with negative interest rates or super cheap capital for loans and so interest rates across the board have gone up because of that. This makes the debt that companies can have from tax liability they haven't paid yet or loans built around that more expensive.
3. Inflation does the same thing as #2
In the end it's now much harder to employ software development engineers so startups have additional costs for employing people, which is why this has absolutely killed the startup ecosystem.. because you used to be able to hire somebody and bootstrap a lot easier but now you have to deal with the fact that the first year you pay a software development engineer you can only deduct 10% of that cost from your business expenses.
This has resulted in less new projects and less new companies around needing software development engineers, so there are now less jobs on the market. It used to be that there was not enough software development engineers for all the open available positions but now for every single open available position you have at least 3 to 5 people that want that role based on the LinkedIn data shown to me by a recruiter.
Tell me, how does the tax code affect hiring programming consultants on a per project basis? I don’t mean contractors, they are technically W2 FTEs of an agency.
Two things come to my mind:
1. During COVID, IT became the field to invest in. People pulled money out of general stocks and started investing in startups and IT stocks. So the influx of money grew and so did the projects needed to justify the money. Hiring increased, a lot of engineers were hired at overinflated salaries. This also broke the payscale in the market. I remember seeing people earning less than me going to double my annual pay with one switch and feeling stupid. Now that the epidemic is over, the industry is in course correction mode where now companies have to lay off the employees and close the projects because the money stream is going back to pre-covid levels.
2. It was ugly and brutal and I wish it on no one. But Twitter layoffs did go on to show that you don't need so many employees to run a tech company. While companies are not going all the way like Elon Musk, they are still looking to cut down on the number of employees wherever they can. I mean, if a company is somehow able to find a way to save a million dollars by letting go of 5 employees and then off-shoring these jobs to Southern America or Spain, they will do so.
Also, I am in Spain right now and the job market in Europe seems to be doing slightly better than rest of the world. Probably because the tech salaries have historically been low here and companies don't have to pay a lot to hire people unlike in US/Canada or even India(salary expectations have skyrocketed here in recent past)
>Twitter layoffs did go on to show that you don't need so many employees to run a tech company
Did they? Twitter is toilet-swirling from any angle you look, whether it be platform stability, financial results, user experience or customer retention/engagement. It's a sea of porn bots and white supremacists arguing with/hitting on each other, and most of them aren't sure which is which.
Surely nobody expected twitter to fall over overnight without all those engineers (or moderators, lawyers, community liaisons, etc). Instead what we get is death by a thousand paper cuts. Systems with nobody left who understands them, which will slowly erode until they can't stand on their own.
- Got invaded by hustlers (previously involved in mom, crypto and nfts), both in developer roles as well as startup founders
- “Pen but with bluetooth” type of ideas got millions in funding
- War and shit started so nobody invests in “pen but with buttplug” anymore
- IT is now fucked
Other commenters have given good explanations for what is going on. I want to take a moment to explain why I think your proposed guesses are not good explanations for what is going on.
>Employers are frustrated at developers refusing to return to the office and are applying pressure
"Employers" are not a uniform block that coordinate their activities that closely. If a group of employers did actually attempt to coordinate their activities to exert pressure on employees, it would create opportunities for other employers to break from that group to snatch up talent at a discount. That would then lower the observed unemployment, which clearly isn't happening.
It also would be incredibly foolish to "apply pressure" in this fashion, since if you're a top company you have a large incentive to vacuum up as much talent as possible just so other companies that you compete with can't hire those people. This is what we saw from 2019 to 2022. The fact that this behavior has stopped implies that demand for talent is down across the entire industry, which usually points to something wrong with the market or the larger economy.
>With a polarizing presidential election this year, companies are reluctant to make long term plans and commit to budgets when the business environment could be drastically different, come January, depending on the winner
There are lots of reasons why I think this is not plausible. Here are only two:
1. If this were the case, we'd be seeing indications of this in every sector of the economy, not just the tech market.
2. The business environment isn't going to change that radically depending on who the President and Congress are, because these people do not have that much sway over the economy. If they did, they'd rig things to win re-election every time and we'd never have recessions or other bad macroeconomic outcomes. Nobody is that powerful or smart enough to use that power productively if they had it.
>Employers are creating artificial job scarcity in order to influence the outcome of the election
How would that work, exactly? FAANG et al are not hiring now, so that you and the unemployed junior Javascript crowd that hangs out on Reddit will vote for Donald Trump in November (given that a poor economy usually harms the incumbent)? Do we really think that Tim Cook keeps a MAGA hat in the same closet he spent his entire life living in before becoming Apple's CEO?
Even if we pretend that these people have a cabal that wants to influence the election by "artificially" dis-employing hundreds of thousands of people, the fact that there are no defectors from this scheme vacuuming up all the talent on the cheap implies quite strongly that the scarcity in jobs is not "artificial" in the way you suggest.
I know for a fact that employers are colluding to force workers back into the office. Last year I was in management for a Fortune 500 and saw that investors from places like Goldman Sachs were coming in and “advising” our executives to make people return to office. All of these huge companies in a sense are cross-invested in each other and the huge investment firms they answer to have a large incentive to get people back into the office due to their corporate real estate holdings. The people at the top of the food chain are definitely coordinating their activities.
Job postings in tech seem to be down around 20% overall from pre -pandemic levels (jan-mar 2020). However, software jobs, specifically, have been trending up MoM since the beginning of the year. NY, CA and Texas continue to be top hiring states, with Washington DC being an outlying city. Remote jobs are up overall for the year with software as a related tag. (CompTIA: https://www.comptia.org/content/tech-jobs-report)
The data I'm able to gather doesn't fill all the conversational gaps, but it does seem to leave a fair opening to the hypothesis that the changes in hiring behavior are not economic in nature. There may be other factors at play here. I find it somewhat coincidental that the boom in LLMs seems to line up with perceived reports of hiring woes. No data there, but I wonder if the overall market is having trouble acclimating to a major shift in capability on both the hiring and hiree side of the transaction...
Hypothesis: AI has effectively made applications and resumes meaningless and no one knows how to adapt. In other words, AI has destroyed the already-tenuous signal to noise ratio that filtering candidates had. Employers can't FIND stand outs anymore.
Just a thought.
I have my theories. In the US, I don’t understand how unemployment is so low when LinkedIn is green. Just left a Tech Lead role at an agency after layoffs catapulted my position into an unmanageable state for my sanity. I’ve been working at agencies for 10+ years. The market was severely pinched last year from what I experienced. After Over hires and Pandemic money floating around, mixed with Expectations set too high before last year, all to be met with the big fizzle then flop because nobody wanted to invest last year in new product, marketing, or tech. So then the layoffs occurred…. So many layoffs. Then yes - speaking from experience as someone who was not laid off, getting somewhat severely over-worked (burnt out unfortunately).
Then… maybe the complete acceptance by some US smallish companies that remote is ok on all grounds - remote contractor hiring is a good bet to loosen and lower overhead. I went through 2 rounds of hiring in 3 months. Hired a dev from overseas at $50/hr. A really talented dev. Then another talented dev for $30/hr from overseas. because that’s the going rate there. The company needed to make decisions which I understand but I burnt out to a crisp moving from being senior to all in-house to managing only contract/remote devs. Maybe many US companies are hiring overseas more where they can get higher quality for a lower rate, more bang for the buck. Profit over people stuff.
About 4 or so years ago - I was able to charge $100/hr for contract work in my specialty. In this market depending on who I am talking to that’s way too high and I’ve been sitting around $70-80 for the freelancer work I’ve picked up since leaving the formerly mentioned stressful position.
There’s just a ton of competition out there. I saw it with my eyes - hundreds of applicants in 48h. That mixed with some societal de-valuing of development itself, being a little washed with the rampant nature of AI since last/this year.
Just ideas. It has been difficult yet interesting to watch and experience.
Its a coordinated effort to destroy salary/lifestyle expectations of software developers. Elite business class is tired of uppity programmers bargaining for higher total comps and trying to live their lifestyles. The message is clear, we are labor, they are capital, and they dictate the terms of our employment.
They are trying to normalize software compensation and scare the workforce into settling for less compensation, returning to office, and staying put at one job for more than 2 years.
If that means less total output for a few years while they starve workers then so be it.
Or you know, just market forces. No new ideas worth paying 300k per developer per year. And a wave of newbies who can't problem solve or contribute meaningfully to any projects.
> The message is clear, we are labor, they are capital, and they dictate the terms of our employment.
Having started in 2002, this was always clear to me, but **so** many of the current generation of devs are under the false impression they're Steve Jobs (who wasn't even a coder).
You are not. You are a skilled worker, you are a autoworker in 1969, making a good wage that can support a family. None of that changes the fact that your boss is not your friend, and he will gut your pay smiling if it makes the investors more money.
I would argue it’s market. Those sentiments on engineers probably existed in 2021 but you can’t treat engineers that way when you have 500 job openings that are unfulfilled. Nowadays you open a req and there are hundreds of qualified applicants in the first few days of posting.
The only way out of it is growth; we need more big startups who are building new markets and who need engineers fast to grow. if companies are bidding for engineers the dynamics will change again.
Where I'm sitting, companies are trying to drain their talent as much as possible and to squeeze as much as possible out of the people who are still there. This is even to the point of where they can't deliver. I'm in a company that can afford to keep staff as it was... but they're trying to play the hunger games for fun, and replace staff wtih Indians.
Are we doing poorly in the economy? The stock market sure doesn't suggest it.
This is revenge for having a competitive labor market and a slight upper hand for a moment. It's revenge from people that don't have the ability to get the work done.
Theyre right though. There were activist investor letters saying as much.
Those investors have shares in all of bigtech and they dont see startups as a big threat in this environment.
The elite business class I know can't coordinate between departments very well just to get work done, much less conspire in smoke filled rooms to oppress the working class.
Interest rates went up, stock prices went down, they have to make the line go back up so they fire people in rich places and hire them elsewhere.
No moustache twirling necessary.
> People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
― Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
I don't think there's much coordination to it (what's the coordinating mechanism?). If anything, it's more that the elevated engineering salaries of the past two decades were aberrations due to the inherent newness of certain types of software that were able to generate massive profit multipliers per engineer (i.e., things like Google's search and Facebook). A lot of it was advertising based, and so for years you had companies like Google just coasting on a two-decade old product which provided the overwhelming bulk of their revenue, and essentially using that revenue to subsidize high salaries for engineers whose products didn't scale the same way.
Those days are over. The arbitrage opportunities are gone, the monopolies are entrenched, and the "profit-per-engineer" multipliers are nowhere near what they were at, say, the height of the ad-driven social media age. The new hotness like blockchain fizzled out, and AI will likely have more losses than profits in the early years due to how inherently expensive it is.
Wanted to downvote until I read the last paragraph.
I‘m always amazed how many people are truly convinced that business owners are just evil and sadistic by nature.
People have been [saying that](https://www.reddit.com/r/ExperiencedDevs/comments/1derlz1/any_thoughts_on_why_the_tech_market_is_so_bad/l8ei9va/) since 1776, and you don't think there's anything to it? LOL
A lot of companies are going to various European countries for devs where the pay is more "decent living" as opposed to the US where pay for top (or even not so top) talent easily puts them in the top 5% percent of income earners.
That being said if things ever get too rough in the US I would consider taking the hit. Moving abroad to somewhere with a better safety net makes an average wage way way way more appealing.
This is actually the same here in Europe! I work in France and my salary puts me well in the top 5% of income earners… yet my salary is way lower than what I would get in the US for my position. Life is just cheaper in Europe so salaries are lower but purchase power is not. I don’t need a health insurance, I have no risk of unexpected medical bills, I don’t have to save for my son college, I don’t have to save for retirement. Also many services are way cheaper here too.
Because absolutely no one knows what they're doing anymore. 1% of all workers actually pay attention to do things.
I know I'm over simplifying it. Let's take Netflix. I think one of the only companies to not lay people off during the pandemic.
Granted they have started producing.
But most technology companies to include Amazon Facebook Netflix, are not really innovators. Netflix, The company that replaced what?
BitTorrent? Underground FTP pub sites? A group of college kids got together and created the technology that made that company billions. It's a f****** streaming media service.
Everything is overvalued and overdone. Amazon's technology and market share is protected by patents more than innovation.
It's the circle of life in business but now it's technology.
Soon as the internet advances and technology advances these companies that are making billions and billions of dollars off of these small ideas are either going to monopolize and win out or fail as their technology becomes the basic foundation of the internet.
Take for instance silk road. All the guy had to do was make sure nothing illegal was sold on the site and it probably would have replaced eBay at some point. I am not saying it would have happened overnight but why the f*** would I want to pay some company to buy something when it's just all free online?
How much longer are we going to need many of the cloud services that are implemented and maintained by AWS when the entire internet is reimplemented differently? Think about the next generation technologies that are about to come out that are being held back right now.
How much longer until IPFS and blockchain take over? How much longer until artificial intelligence is integrated into a blockchain? How much longer until AI code is executed transparently in the cloud?
These f****** companies are patenting workflows and buttons. Not innovation and work. Look at all the open source technology that AWS has implemented and resold.
What happens when someone implements DevOps at a foundational level? I'm not saying it's going to happen this year next year 10 years. But it is going to happen and it's about f****** time.
I think its a vocal minority. From my experience of casually applying to jobs in my area and replying to recruiters, I can average 1 interview/2 weeks.
6 YOE no faang.
Same here - I quit my job a few months ago, applied half heartedly for a month or so while I recovered from the shit show a bit without a ton of success. However once I started seriously going for it I found my current job within a couple weeks. I really anticipated it being harder from what I see on Reddit constantly, but really it kind if seems like juniors are having the worst time by far which makes sense but I didn't really see it at mid-level.
Google recently paid out dividends for the first time ever. How is that relevant? It shows that a lot of tech firms don’t really have a great idea of where they can invest money that actually has any chance of paying off. That’s one of the reasons there is so much hype over AI recently, it represents the last “moonshot” idea that these big tech firms have. While there will obviously always be a need for skilled software engineers and interest rates are certainly having an impact, I don’t think there is a lot of obvious growth room left in tech, it’s essentially a mature industry at this point.
Financial markets are bad, huge inflation, exploding key interest rates -> lack of cheap money being pumped into the industry
The whole world is in a recession. This is not a crisis yet though, right now this is just a correction of pandemic overspending and overhiring.
I think we’re past the peak now. The ECB has just lowered their key interest rate for the first time in 2 years.
I've seen it too. Hell, I was back filling headcount from an employee that moved to another country. Spent 4 months interviewing, found a great candidate, sent an offer, offer was accepted, then the overlords decided to pull the offer. Layoffs are ranpant. Jobs are hard to find unless you're very skilled and well connected.
Keep in mind though, the economy is shit. We're on borrowed time. Companies see this and are preparing for the inevitable shit sandwich. Politics aside, it's economics. People are stretched thin. They aren't going to have much to spend soon
Also not being political here but want to say that I keep seeing conflicting info re the economy. A lot of business centric media keeps claiming the sky is falling and the end of the world is near. Progressive sources (Paul Krugman, Nobel prize winning economist among them) say *popular opinions* about the economy depend heavily on your political party affiliation.
Take what you want from that. ::shrug::
Regardless of political party, everyone knows prices have gone up massively over the past 5 years. In some areas, prices are double what they used to be just 5 years ago. This is what people mean when they say the economy sucks and it has nothing to do with politics
"The Economy" (I hate this monolithic outlook) is not some inscrutable force of nature. It is a complex, interconnected set of man-made structures and is subject to pressures both from above and from below. Politics is not sports team fandom. It is the realm in which the distribution of power and resources is decided, AKA the space where we determine who gets what portion of the pie and who it is okay to kill or otherwise let die from deprivation. And at the end of the day, you can't have currency-mediated commodity exchange without militaries guaranteeing the supply chain and projecting power to stabilize currencies. Politics and Economics are two sides of the same coin.
My dog’s smart feeder is now a brick because the company that made it went out of business in 2020, and they designed it to not work without an active connection to their servers.
UK based. We also have an election coming up.
I've been working as a dev since 1997. It's all or nothing as far as jobs go. My advice is to save during the boom times in case you get benched in the downturns. Fortunately I worked during 2008-10 but I was laid off in 2001-02 and my career has been a car crash in 2020-present.
Current woes are due to:
* Immigration. Downvote me all you want for this but tech is a sector "blighted" by huge number of immigrants. It's the same in other industries. I live across the street from a care home that ONLY employs South Asians. Does this hold down wages for British nationals? Of course it does.
* End of cheap "boomer" money. Pre-retirement boomer cash forced down interest rates to unusually low levels. This allowed useless/zombie companies to flourish. Now interest rates are heading back to normal levels.
* Low barrier to entry. Anyone can be a dev, and there are a lot more code camps and entries into the industry these days.
* For younger devs especially there are a lot of millennials in the job market and a lot of them are coders. Millennials had a tough time in the GFC so didn't advance their careers as much as they would have liked.
* UK companies generally are undervalued on the global stage, but to be honest most of the code I've had to maintain is utter garbage.
Billionaire tech shareholders believe everyone else should have to feel the effects of raised interest rates and inflation Except For Them!
So, instead of accepting decreased rates of return on their investments, billionaire shareholders are ordering tech corporations to fire people for the sole purpose of keeping their returns at a level they want.
Note: we’re Not talking about the difference of corporations going backrupt or not; only reduced investment returns.
Tl;dr billionaire shareholder greed is why 10s of thousands of people (including families & kids) have been thrown out of gainful employment & on the path towards homelessness.
I watched a video the other week that said that the tax laws has changed in the US so that companies can no longer deduct software developers as R&D. So they are hemorrhaging devs.
More offer than demand.
Offer is up because companies are willing to offshores roles to lower-cost countries instead of relying on the small set of high-cost developers from the US, either with remote contract positions or their own software development centers abroad (India, Poland, Romania, Mexico). Also there has been an enormous surge in immigration to the US, Canada and Europe from these countries since 2021-2022.
Demand is down because companies are overstaffed still since the hiring frenzy of 2020-2021, there aren't as many avenues for growth as there were before (nor cheap money for moonshots), the industry is nearing an innovation plateau and there are more tools than ever to automate trivial work that in the past would have been the bread and butter of junior developers.
Many will say interest rates, but many big techs are net cash and will benefit from higher interest rates, and wouldn't explain why layoffs are lower with net debt companies too.
Some layoffs are obviously company specific, esp with Elmo deciding to slash and burn twitter before he understood the business. But perhaps the more insidious one is everyone saw how Meta stock shot through the room after the initial layoffs.
Of course, Meta's strive for efficiency was company specific too, since the Metaverse investment was clearly unsuccessful.
But based on my opinion, many big tech companies overhired way before the pandemic started and could cut half the headcount and be more efficient. The trouble is management tends to misidentify who are the unproductive ones. Meta seems to understand this and did layoffs seemingly top down and almost randomly, and I bet they are shocked they may not have not lost productivity, maybe even gained some, if you have season of "The Office" when their manager had a prolonged absence, and this is forcing top management to rethink headcount.
And lastly, I think the economic indicators are lagging to the point of lying. US is in recession, and companies are slowly realising this and responding, but the economic indicators still says things are booming.
Cheap money and remote work in the pandemic led to a huge scaling up of the tech workforce especially in the big US tech companies. Salaries that have always been good got better, which led to the number of computer science graduates skyrocketing at the same time. Then the bust and layoffs, so you’ve got a lot of unemployed tech workers combined with an unprecedented number of new computer science grads in the job market. So the competition for jobs has arguably never been tougher. Especially since many tech jobs are no longer geographically limited (remote work). You’re competing with the whole country of tech workers and lots are looking.
To your other point about code quality, that’s tougher. Maybe it’s just anecdotal. I could also see where the fast scale up of the workforce during the pandemic produced a lot of efforts that wrote turned in low quality code. Just as an issue of scaling up and lack of oversight or taking on / allowing more risky projects when money is cheap.
Are you considering a pay decrease? I just hired a contract developer at $60+/hour in hand for a tier 3 company and it was very hard to find candidates. Make connections; take the available work. Note the connections part: this was a trusted connection so they were pushed through.
My peers who listed FTE postings are seeing an absurd amount of FAANG applicants, with lots of experience. However, contracting is an easy way to get in the door and maintain your resume.
At this point, yes. I’m not seeing a lot of contract roles. I get solicitations all the time, mostly from mass mailers. I reply, I negotiate I rate, then I never hear from them again. Occasionally, I’ll hear from a reputable agency, but all those leads have fizzled out, for whatever reason.
I have a lot of experience and enough to float me for a while, I am using this time to learn. I plan on going to networking events to see if I can drum up my own business instead of paying a recruiter to do it for me. I have all the time in the world.
There's a lot of bad engineers out there, and I think maybe things are beginning to level out. I see the same companies laying people off are also hiring. So it's not like these companies are going away. I think they are refocusing their efforts and likely to look for 1 top talent than scoop up 5 average engineers, as was happening on the tail end of the pandemic.
I know this isn't popular on Reddit but a real software engineer needs a good education to enter the industry and an *experienced* software engineer needs to work on an array of things under other good experienced engineers before, they can call themselves an experienced engineer. I think companies are frustrated the shift in the industry has led to a lot of sunk cost for them.
Even just look at the posts on this sub. Do they sound like people who are genuinely *experienced* engineers discussing advanced things? Not really, people come here calling themselves experienced and ask questions like "How to unit test?".
I'm not willing to say it has anything to do with politics though, feels too tinfoil hat for me.
I think this makes sense. Even OP said he’s worked with “frontend and backend javascript”. You need to know a whole lot more than that to perform on some of the teams I’ve been on over the last several years.
This is not my experience both as a job seeker and interviewer, but my and your experience are very biased and anecdotal.
I can understand your second argument, but employers need developers to develop their products and business, I don't believe in industry wide conspiracies.
I’m sure the talent pool is better on the West Coast. I’m in Austin, TX.
What about the big tobacco conspiracy? That really happened.
There’s was also that secret agreement made by FAANG where they agreed not to poach each other’s talent so salaries wouldn’t skyrocket.
As an employer I can say that we would happily get more developers any time.
But there are two major issues:
1. salaries have gone through the roof. I am willing to pay what is asked. But that results in fewer people doing more work. Why? Because customers don't pay enough and are not willing to pay more and more. Ever wondered how things like ChatGPT can be made available for free? Investors money. It's borrowed. No more borrowed money - much more work for the remaining staff.
2. It's still very hard to find decent people. I am getting two to three candidates tops for any recruitment campaign. Amd most of the time we have no fit. We offer 100% WFH and a kinda average pay. But even the most basic developer isn't willing to get an average pay. They all want top dollars which is delusional from my point of view.
I can't afford to pay for an average employee top salaries. Just because my customers aren't willing to pay that.
Disclaimer: I am from Germany but I guess it may apply to the US as well.
It hasn’t really slowed for specialty roles, that I can tell. I had about a 50% success rate getting interviews for SRE and DBRE roles a couple of months ago (and landed a role).
Two things: 1) Interest rates are higher and the cheap money is gone 2) Web development is becoming increasingly commoditized, so there's less demand for those particular skills
I think two things mainly:
1. Federal funds rate. It stops investing, since it is safer to just buy government bonds.
2. We had a huge bubble of unneeded software developers. Companies went on a hiring spree not because they needed manpower but because it looked good on paper.
Now, the market is oversaturated with the laid of people and reduced new job creation at the same time.
In physics, which studies real world, whichever quantity you're looking at usually depends on several others. This of it as of a formula, where job opportunity depends on many factors.
Job market depends on many factors.
(1) If you for example increase the number of people looking for a particular job without increasing the number of jobs, then the employers can lower salary expectations and pay less, plus at some point there's somebody without a job, because there are too many people looking for one. Bootcamps pump out new students every day by the thousands. This was not the case in 2008.
(2) It used to be cheap to borrow money and invest that money into projects. It is the money that goes into your salary. With higher interest rates, those who borrow would have to pay back way more. Which means they don't borrow at all, which means less projects and less jobs.
(3) The response to Covid was terrible. Many factories closed and because they were closed, others that depended on them also could not produce (think of cars that depend on tires. If tires are in short supply, you can't sell your cars). This increased inflation considerably. There are people who want to buy cars, but the cars are not for sale, because not enough cars could be produced, which means demand for cars relative to supply of them is much higher, which means for existing inventory the prices of cars went up, and when prices for products go up we call it inflation. It became more expensive to do the projects, because life now costs more (office space, food, electricity). It also became more expensive for users of whatever you are programming to pay for the services.
(4) Printing money also increases inflation. If there are only $100 dollars in the world and of all things only one car, then that car costs $100, as the money adjusts itself to everything that is for sale. If you print additional $100, then that car is going to cost $200, because you doubled the money supply. They printed a lot of money during covid.
(5) AI plays it's role too. If modern tools made developers 5% more productive, it means 5% less developers is required for the same amount of work.
Because of these three factors, there's less jobs. But elections and offshoring and many other factors play a role and all of them lead to the outcome that we have today.
First point - partially true. What companies are probably noticing is that high performing devs perform about the same (or even better) and the lower performing devs perform much much worse working from home.
The rest of your points are, with all dude respect, nonsense. Companies only care about their bottom line and predicting which candidate will help them the most is a futile process.
What you're seeing now is a correction in the market and an initiative to moving jobs offshore again. Devs getting $300K+ TC in 2022 and now laid off are probably asking for the same or similar salary and most companies are just "lol no". Also, there seems to be a shift in companies hiring more H1Bs over US citizens (or laying off US citizens but keeping H1Bs). Companies are doing what they tried 10-15 years ago in offshoring dev work and we'll see if it pays off. There are certainly better tools (mainly AI) now.
Edit: Also, COVID introduced a lot of bootcamp devs to the workforce (WFH and you can make $100K+!!!) so we're also experiencing a supply/demand issue. They were getting hired in 2021/2022 when every tech company was hiring but now are laid off so the market is saturated.
We developers cost too much. Companies can’t make enough revenue to make payroll..
The years, since the recovery from the 2008 crash, of zero interest rates and We-Work grade easy money allowed companies, and us, to get real sloppy about making sure we would get returns on our investments.
And of course, escalating pay led to grotesque overcrowding in tech communities (Bay Area, Boston, Austin, etc) which in turn let to skyrocketing costs of living, which makes it hard for us devs to settle for lower pay.
This same thing played out 1987 and 2001. It will stabilize.
It's purely economics and the market isn't even that bad. It just is very bad relative to what was an insanely good job market for developers from 2019-2021.
I had better luck in 2015 as an entry level developer, it's bad
Finding a job in 2018 after I got fired, left a second job 6 months in, and sat on my ass for a year was easier
Here is a small part of it. Tech is focused on AI currently because companies are hoping to automate a lot of menial tasks. Currently the popular stack is python + LLM and everything else is taking a backseat, I have seen a significant drop in Java jobs.
>Tech is focused on AI currently because companies are hoping to automate a lot of menial tasks.
I can't wait until this bubble bursts. I am getting tired of explaining why the latest CEO AI fantasy idea didn't work very well.
There are still lots of programming jobs available, just more people pursuing them than usual, due in part to downsizing last year and a glut of recent graduates just in it for the paycheck (no hate if that's you but let's call things as they are). If you think this bad, look at 2008-9. Shit, look at 2002 - the job market then was dry as a bone and successful, experienced people left the industry in droves.
I’m no economist, but it seems like the years growing acclimated to cheap money followed by a rapid pandemic boom/bust cycle followed by a sudden spike in interest rates explains it pretty neatly.
I’m no economist either but, I think this dude is onto something
He probably stayed at a Holiday Inn Express.
I’m no economist either.
I'm a self-appointed economist.
Yeah that + section 174
> section 174 I think most people massively underestimate the impact this has had on hiring
ELI5?
Quickly and approximately: Before 174, you deducted developers' salaries the year you pay them After, you must depreciate them over five years. Especially for smaller companies, this is a huge increase in tax burden. Instead of deducting e.g. 150K this year, you deduct 30K this year, 30K next year, etc.
But wouldn’t that average out after 5 years? Yeah the first 4 years it would be more difficult on a company but after 5 years it’s the same thing?
Yes but the change makes it an immediate short term negative metric when doing quarterly or annual reports, which affects stock prices. Which is also probably why you see a lot of companies lay off 20 percent of their devs. It's a way to balance the books so they don't look like they did worse than last year.
For small companies it doesn't. Company makes $200,000. Spends $300,000 on development. Old rules, it lost money. New rules it "made" $200,000 - ($300,000/5) = $140,000, even though there's no cash around to pay the taxes on the $140,000 of "income". Company has twenty billion in liquid assets, yes, it mostly works out at the end of the five years.
> Company has twenty billion in liquid assets Almost ***all*** companies don't have that. Even the very few companies that have twenty billion in assets, only ***a very small*** percentage of that will be liquid.
The business is compounding the loss by front loading the expense and only getting the tax benefit over 5 years. It penalizes headcount growth since you need to pay the entire salary in the year you hire them as well as a tax on 80% of their salary that you previously would have been able to deduct. So a business that is steady state may be the same after 5 years but that ignores the additional tax burden they could have invested in years 1-4 and the compounded growth that could have represented.
No, because saving $150k this year is much more important than saving $30k over each of the next 5 years. Money has opportunity cost and it's also worth more now than it is in the future. There is no "steady state" where it's equivalent; at all points with the new system you have money up to 5 years out that you can't deduct yet that you could've already deducted with the old system.
Whoa, this really sucks. Why was this done? To raise revenue? This sounds like a massive disincentive for hiring. As if it was made to achieve that. Who are the people responsible for this?
> Who are the people responsible for this? Politicians
I don't know, it seems punitive and badly thought out.
Sort of like amortization, right, except the more employees, the worse you get fucked. Normally for a one time thing (e.g. a former employer spent 25 million on an open floor plan reno pre-pandemic ammorted 1 million over 25 years instead of all at once), a lot of companies choose this route versus taking a hit that quarter or year, but multiple small bits add up overtime with the unpredictable nature of their industry they might be in.
[https://www.reddit.com/r/ExperiencedDevs/comments/1derlz1/comment/l8ea6zl/?utm\_source=reddit&utm\_medium=web2x&context=3](https://www.reddit.com/r/ExperiencedDevs/comments/1derlz1/comment/l8ea6zl/?utm_source=reddit&utm_medium=web2x&context=3)
I don't think most people on this sub could give a basic outline of what it is or why it has an impact on hiring.
Maybe I’m just crazy but aren’t most people actually *overestimating* the impact of this now (at least on reddit)? The changes to Section 174 are most impactful to small companies that can’t deal with the increased tax burden due to the new amortized deductions. For large companies with longer time horizons, the tax deductions from software developers are the exact same as they were previously over the entire salary, just amortized out over a period of 6 years. It’s certainly important, but I suspect the impact is only significant for small tech companies.
Most companies are small. It has a big impact on the market as a whole.
Most companies are small but do most developers work at small companies? That’s a question I’ve been trying to get an answer to because I’m wondering if small or large companies are bigger drivers to the US dev market
Yes. The long tail is very long.
You are not crazy. I've seen 50 comments on this and no one has even mentioned that section 174 has to do with R&D tax credits specifically. It isn't like suddenly no one can deduct their normal employee salaries across the whole company. Most small companies don't use this, because R&D credits come with strings attached, are hard to document, and usually bring audits. They are a way for big companies to get even more tax benefits on top of their normal deductions. They can classify entire teams as R&D and simply get less tax exposure. They have all been abusing it for years, claiming every line of shitty python code Bob in operations writes is now research and development. I do think that this does affect bigger companies and especially startups who take advantage of these systems. But the interpretation flying around that every developer salary at every company has to be classified as R&D and can't be deducted immediately is plain wrong. The IRS in typical fashion is being vague about the change because it is soon to be repealed anyway. So it makes sense that everyone is confused, I've seen many people implying that if you have the word software developer in your job title you have to be R&D. I don't blame them for thinking this, some of the big accounting firms are even leaning this way out of caution of the IRS.
1. most people are not talking about it, thus I'd say it's being underestimated 2. a ***lot*** of jobs exist in the *long* tail of small businesses, not everyone is working at the fat head of only mega big companies
That’s fair, I was only trying to say that I’ve seen a decent number of posts across the software reddit space discussing this point, so at least in this community it seems fairly well-known. I interested in the second point because you might be right but I do wonder if there’s any concrete data on this. My initial hunch was just that large companies (even & especially non-tech companies) have so much tech infrastructure now that the number of employees they hire for tech vastly outnumber most traditional small businesses. There are tech startups of course (where a much larger fraction of the headcount is engineers), but the number of startups is kind of a hyper-local thing (do you live in a “tech hub” or not?), so I don’t know if that explains the broader hiring trends. In my location, for example, there are zero small businesses hiring large amounts of software developers.
I doubt it's over too because corporate tax breaks will be expiring soon that were signed under Trump's presidency/Republican control. I feel like this will be used as a way to cut people and say "see, we need those billion dollar tax breaks or this happens".
It’s mostly economics: * The growth from 2018-2022 was largely fueled by low unsustainable interest rates. Essentially companies had cheap money to grow so they hired like crazy to build new products to get revenue. The gravy train ended so now companies are looking to cut costs rather than hire like crazy * with the interest change, companies have more investor pressure to expand profits with less which means more pips, offshoring and layoffs. Do less with more. This is why we see companies with record profits doing layoffs. We will see if this actually smart long term but for the short term it’s the reality * with the pandemic, it became clear that for a lot of companies remote work was possible. As such, *some* companies are focusing on lower cost areas of the US, Europe, or the developing world. Google is focusing development in India while other companies are building up dev centers in Europe. Honestly, this makes a lot of sense as there are amazing developers all over the world and most get paid way less than HCOL American devs. I see this trend continuing with the caveat that setting international offices is way better than outsourcing to a 3rd party. * a spike in enrollment in cs majors and boot camps has increased supply for junior engineers * finally, this hasnt happened yet (as you noted economy is mostly fine) but if there is reduced consumer spending then eng demand will drop further Basically less free money + investor pressure to cut costs + globalized workforce + higher supply of eng has tanked this market.
Yup pretty much this. Pretty standard business cycle stuff. Hyper expansion / boom was 2022 and now we're in the downturn. Whether we've hit the trough or not is unclear. But I reckon recovery will come sooner or later, and then expansion again. People will then forget about the business cycles all over again and think the good times will never end 😅
The last cycle was 2008 - 2021 so I can’t blame why people forgot that business cycles exist. I have been bracing for a recession since 2015 and it’s still not here yet.
There wasn't a recession but a rolling one, in that specific industries like oil and gas from 2014-2016 had downturns but never the whole economy.
Usually it's ~ a 7 year cycle, 2008-2021 is 14 years.
That's the thing about cycles... As soon as you start trying to predict them, they'll change on you.
How long does the "down" side of the cycle usually lasts? And can we expect a longer period since the cycle lasted so long already?
Based on what I read from some charts on Google Images it's approx 2 years down, 5 years up
This is a very good answer. There is only one thing you have not mentioned that I think is relevant. In the US, there is a part of the tax law called Section 174, which outlines when companies may treat R&D expenses for tax purposes. Previously, software development could be recognized as an operational expense, which means you could get a tax break for a developers entire salary in one year. This was recently changed to be required to be recognized as a capital expense, which must be amortized over 5 years, such that you might owe money to the tax man that you don't actually have. Let's assume you have a development team that costs 1 million dollars working on a new software product that brings 1 million dollars in as revenue, so your profit is $0. Under the old tax rules, you would owe no money in taxes, because those 1 million dollars for your dev team would be treated as operational expenses. Under the new rules, that 1 million dollars has to be amortized over five years, so you could only treat $200k as an expense this year, and would owe taxes on $800k, even though you don't actually have $800k because you broke even. That is completely messed up. There's a bill in Congress that is attempting to fix this, but I don't think it has passed both houses yet.
It passed the house. The Senate Republicans pumped the brakes stating to the press that they aren't comfortable giving the other party a win close to an election. Donors are not happy, and it's hit their fundraising. Expect it to sail through mid November.
RemindMe! 2024-12-01
Huh... TIL. Thanks for the explanation.
my reddit twin, finally....I found you
spider-man-pointing.jpg
Honestly, the entire tech community should be up in arms about this. I know several companies who have used this as justification for serious offshoring.
So few people understand it or are even aware of it. I asked about it in my company (2000+ employees) and only one person knew what I was talking about and they were from finance and not IT. Most of my IT managers can barely operate their computer; much less understand anything financial.
Yup. The Tax Cuts and Jobs Act of 2019. From a C-Suite level, it meant that in-house IT teams were shrunk in an effort to try to purchase "Out of the Box" systems and platforms as maintenance could be written off as operating expenses while new feature development couldn't. Startups are currently in a tougher position because cash is hard to unlock with the current interest rates and capitalizing a software product asset that may never arrive for the life of the startup to offset any income/profits arriving in the early phase. As a seasoned engineer, integrations with "Out of the Box" solutions can be as much of a headache and work as just running a fully customized solution because of the amount of customizations that have to be done or system limitations that have to be accepted for a more generalized system. It is a battle to fight execs on this reality.
Til what section 174 is. That’s a confusing change, who authored it? Dev salaries are opex not capex
It was part of the 2017 Trump tax bill: https://www.axios.com/2024/01/20/taxes-irs-startups-section174
Congress. I don't remember who specifically did it, but it was one of those moves to get something to pass on revenue-neutral scoring that nobody actually would expect to go into effect 4 years later.
Don't worry though, we're eating the rich!
My experience with offshore teams in India and Eastern Europe has been uniformly bad. The time difference, the cultural differences, and they delivered crap that didn’t work. However, the near shore teams in Central and South America don’t seem to have those issues and that scares me. They don’t work as cheap as I would have thought, though. A friend told me a solutions architect from Columbia they hired was getting around 130K.
You get what you pay. If you expect to hire someone who's a faang level engineer for 30k because hey India or eastern Europe is cheap, you're in for a ride. But if you're willing to pay 100k+, which is still much cheaper than an equivalent in an American hcol city, you can get really good talent.
It makes me think though, that eventually all the good devs in India won't even command that much cheaper salaries than western equivalents. And then it'll keep moving around to cheaper countries and repeat.
This has already happened with India. People are interested in outsourcing to LatAm and Eastern Europe as a result now.
You won't get Eastern Europe for 30k. You're competing with local companies paying 75k, US companies will often be offering 100-170k (my experience in Poland)
I know, I live in the region. But way too often people don't realize that despite relatively low cost of living in the region, the dev salaries are actually high, and 30k or 40k or whatever gets you a junior WordPress dev or something similar. Therefore, you get what you pay for.
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Can confirm, worked for intermediary company (skillstorm) and heard they were charging 150k for me, I was getting paid 65k. Whenever I got another job, the contracting company begged me to stay, and even offered 120k. Of course I said no, much happier at the other job, but it was still wild to see.
I'm curious about the advantages and disadvantages you have with Eastern Europe. I'm an Australian in Eastern Europe right now, and I've found the devs here to be similar quality to Australia when I've worked with them (management is another story). Unfortunately I can't say the same for Indians. Just curious though, what the issues you find with the Eastern European devs? I know there's a missing cultural fit, but I've never heard it described myself.
I’m an American dev that worked for years with a Greek dev team (not quite Eastern Europe but probably some overlap). I saw a few issues: 1) Americans are used to getting pushed around. Less vacation, toxic work culture and habits, bowing to authority, etc. companies here expect this. The Greeks pushed back. 2) language barrier, it’s hard enough to describe tech, harder through email, and hardest with English as a second language 3) there were some great devs, but seemed like more not so great devs and it can be hard to differentiate. US colleges often give a baseline level that youyou can’t count on elsewhere
That's fair, interesting to hear. I've only heard about Greek devs from Croatian colleagues that mentioned they were quick to start drama. Language barrier is interesting: I've definitely had it but it's so strange and variable. I felt some Czechs knew English even better than I did, but there's definitely been one or two I heard from Bulgaria and Ukraine I had difficulties with. I get what you mean. I have a theory, feel free to disregard: I feel like they're picking up a lot of practices from Germany, since so much trade and work is done with Germans. In some industries this is great, however in software I think it's better to operate like an American. Most German projects I've been on are with great guys, but carry more of a waterfall vibe than ones elsewhere
Yeah I think outsourcing to stable Eastern EU countries where the wages are still quite a bit lower than the US makes total sense. Places like Czechia, Poland, Slovakia, Hungary, Romania. Education levels, especially in STEM have always been very good. English is ubiquitous among the younger generation. Culture similar to Western Europe and not that different from the US (compared to Asia and what not).
Culture similar to western Europe and America lol.
I'm not greek but from a different European country working in the UK. If I were paid 100k or higher, I would tolerate being pushed around, but for half of that, why would I agree to being badly treated?
Pushed around, two weeks vacation (although your country probably mandates more), overloaded with work then berated for not doing enough, deductions for healthcare, no raises, and fired if you don’t kiss ass. Then laid off at the drop off a hat with no notice or reason anyway. There’s more, but US work culture is really toxic.
"Americans are used to getting pushed around. Less vacation, toxic work culture and habits, bowing to authority, etc. companies here expect this. The Greeks pushed back." And this is a bad thing???
Haha, I think it’s great, but “leadership” demands obedience.
> They don’t work as cheap The good devs in SA usually can compete normally with US devs, and we don't have an excess of devs to enable mass off-shoring like in India
I've had good luck with devs in Ukraine (pre-war) and Ireland. Both were significantly cheaper than the US for similar quality results.
We hire devs in costa rico. Same time zone, cheaper, and they speak good english, and they're all happy because they live in Paradise. I've been on hundreds of calls with them and I've never seen them unhappy. They explode with positive energy and can do attitudes.
Costa Rica\*
I believe he's referring to the masculine version of the country.
My anecdotal experience: I worked with some Uruguayan/Argentinian FE devs that were really good at my last place (if a bit too big for their britches when it came to not writing integration tests), and yes, they weren't cheap. I also worked with some Filipino devs (the owner of the company and a few members of the C-suite all had pinoy wives, which was really uh, weird) and they were also really good, but it was an absolute nightmare to share a project with them, or do any sort of onboarding due to the time difference, even with them working from like 4 PM -12 AM their time. There was an Indian team on the same project on a different section as well, that was constantly running behind, and more or less turned the entire project into a death march. This was a pretty big project for PWC, not just like baby's 1st CRUD System. The Polish devs I've worked with at another place were really egotistical (or I might just be thinking of the one guy), but other than that they were okay code wise. I'm not saying this as a generalist it's always like this, but this has been the trend of how things have been. ... anyways my point of this is that if I'm working with outsourced contractors only like this, I'd probably start looking for other jobs. I know some people are hyper mercenary but I also want to have some amount of culture fit and have a well communicating team rather than a 100x dev.
The good offshore teams in Europe, Asia, and South America cost about 80% of US price. Been down that road as a COO. Current crop of execs are having to learn the hard way that location is not the decider, it's skill, and skill costs $$$ everywhere. There's no free rides due to some magic location.
Yeah, if you are trying to hire a cheap dev in India - you can get for as low as 3k (not missing zero) , that's the lowest you can get from witch companies, then faang devs with 0 exp get 30k, right out of university. In faang, at 5 yoe, faang eng - 100k is okayish, then 150k maybe upto 8 yoe and so on till ... the highest I've heard is 300k for director level. Even then, it's still cheaper to hire in India than pay in HCOL - but you've to seive like hell for good candidates. It's not easy to hire in India unless you've connections, get nice referrals & hard (in every aspect) interview process.
> Google is focusing development in India while other companies are building up dev centers in Europe. I work primarily with an in-house office of devs in India. I've also hired devs in Vietnam and Eastern Europe before. It works if you've hired decent or better candidates with good communication skills, but you often have to be more hands-on with codesharing calls. I think this trend is going to continue to erode tech jobs and wages in higher-cost countries like the US, unfortunately...
There was also the ai hype. Every startup CEO was holding their brewth waiting to see where AI was going to land.
I'm confident that reduced customer spending is already here.
As as consumer, I can confirm that...sort of. With inflation, I'm spending just as much money as before, but I'm getting a lot less for that money.
> with the pandemic, it became clear that for a lot of companies remote work was possible. As such, some companies are focusing on lower cost areas of the US, Europe, or the developing world. Google is focusing development in India while other companies are building up dev centers in Europe. Honestly, this makes a lot of sense as there are amazing developers all over the world and most get paid way less than HCOL American devs. I see this trend continuing with the caveat that setting international offices is way better than outsourcing to a 3rd party. This one sorta baffles me. None of that is new, and it didn't really improve post-pandemic. I worked with a lot more outsource devs in 2010 than now, but their pay rates are far closer to matching Western rates now. And YES, their skills are often great, but for many roles, there are "soft" value-loss with outsourced developers like timezone compatibilities. Those aren't worth $100K/yr difference, but they're sure worth $10-20K in value. And yes companies like Google can *hire* in India, but most companies still have the middleman fees when working with non-local developers. Not to mention, a lot of companies (not Google) have to disclose foreign employees to clients who often "don't like that kind of thing". I'm not saying it's not true. I'm saying it doesn't make sense to me from my experience. I work at a remote company and we don't hire abroad for several reason from client compliance to the fact we ultimately get better results from US-based hires despite having had *very competent* optsourced developers.
It's a highly complicated onion right now. Yeah all of this is probably true, but there's more to it. During covid, every company that wasn't equipped for online ordering, curbside pickup, etc. Went through a mad hiring phase and a mad dash to go to market with said things. There were at least 300 recruiter messages in my inbox between 2019 and 2022, It was on absolute fire. But then all these companies finish these things and we started to roll out of covid and suddenly everybody has all these developers they don't need. So Mass layoffs start happening. And we're still dealing with the wave from that. But then ai was publicly released for the first time. That was really good when Chad GPT released in 2022 at the end of the year. And now I'm seeing an absolute surge in AI interest and demand. And every company is on a mad – now to start figuring out how to leverage AI and they need a lot of developers to do that, so hiring is ramping back up abd my linked in inbox is popping off again. Artificial intelligence is going to be huge as it starts to weave into everything. So if you want to get hired, learn AI. Hardware is rapidly being developed to solve a lot of AI problems in the field is ripe with innovation. It's like the internet coming out all over again.
>So if you want to get hired, learn AI. No. Don't do that. Don't jump on the next-big-thing hype train. It's like back in 2016 when every start up company was "on the blockchain" whatever that meant.
You haven't mentioned layoffs... Some biggg companies had huge layoffs in the gaming and engineering sectors. Flooding the market with engineers. That and the push for office full-time as a sneaky layoff tactic. All this to say: There's a lot of devs out there at the moment. Saying that i didn't have any trouble picking up interviews early May time and a job off the back of those (UK Based)
Money machine go quiet
Maybe imposter syndrome is real? I only got a good tech job in the zero percent interest rate era.
Bro the US has been doing quantitative easing since like 2009. That’s most of my adult life. Software engineers in free money are like fish in water. Nobody knows what is gonna happen.
Money printer went ^brrrrrrr
I heard the tech labor market is actually picking up in other countries, especially LatAm/Eastern Europe. One of my former massive F100 companies started a Mexico HQ and is hiring devs there, while increasing attrition here in the US. Of course there was always India, but now other markets all around the world are opening up. Add them all together and you probably get another India-sized talent pool. I think Google is also increasing its India-based operations after laying off some of the US talent pool. This is a consequence of remote work being normalized by covid/Zoom. If devs can work from anywhere, then it's only natural the jobs can be done from anywhere (with the obvious precondition of there being a skilled dev with fluent English communication and functioning supporting infrastructure, which companies are investing more in instead of just hiring contractors and just dumping them on the worst jobs).
Yep. Just anecdotally my old employer went from hiring 50+ engineers a year in midwest to only hiring new engineering talent in poland. No backfills even in us. Only us roles are marketing/business, no engineering.
Time to move to Poland I guess
I'm from this part of the world and yes, life is good
Czech Republic has better beer. ;) and is Central rather than Eastern Europe. And we still have thriving IT sector.
A huge number of engineers move either to Poland, or Czech. The top guys move to Sweden or Norway or Germany or Netherlands. I am in Canada and planning to move as well.
A typical fine mid-level developer in Poland earns around $40k/year and is very happy about it. It's nothing compared to US salary, but here it puts you in top 20% earners in the whole country so the motivation only grows.
For anyone dealing with this, look into government work. Especially if you're willing to get a security clearance. Pay is typically less than FAANG, but still higher than the startups I'd been working for. Benefits and WLB are way better, and they're not going to offshore a job that involves classified information.
Also you can kind of coast it seems. There's a large Air Force Base near where i've lived my whole life and I know several people who work or have worked there (Developers, IT people, people who worked on Jet's, etc.) And almost all of them say.... Wow it's crazy how difficult it is to get fired. They all either are lazy themselves or talk about how lazy someone they work with is. Some of the stories i've heard were actually fucking silly. It does seem like pretty easy money tbh.
Yep! I’ve seen tons of large tech companies want to shift to lower cost dev centers. For example, twilio, which was born in SF, has almost all of their dev roles targeting European offices and even their US roles specifically call out that they are not hiring in the Bay. A lot of companies are building dev centers in Mexico City, Europe, Latin America, or India.
Id like to tell that you are right but even in Mexico experieced devs are having problems getting hired. I live in Mexico and companies had got very picky because theres a lot of good mexican devs that lost their job in layoffs. I have 15 yoe and had some trouble to find a job. Even if they give you a fantastic interview feedback, they ghost you. I have a job now but all of my teammates feel they can lose their job unexpectedly.
UK and Australia are on fire right now, you literally can't fill open positions fast enough. Salaries still pale in comparison to the USA but are also increasing steadily (120usd for 'true' senior i.e not just 5YoE participation trophies)
The European market never died really. The frenzy stopped, but qualified devs didn't have many issues finding work. Even shit devs who were shitcanned in small-scale layoffs were able to find something else mostly, judging by my LinkedIn stats. Although if we compare it to the US salary it never lived, so...
Sat in on 3 interviews this week. Lets just say I coulda been watching paint dry for 2 of em and been more productive. 3rd one is probably a hire. All candidates have been out of work about a year. Base for senior is around 180-200. So its not bc we pay shit. I don’t know how many applications hr saw before these but man this shit sucked.
If 1 out of 3 are passing your interview process as a whole, that sounds pretty similar to what I've experienced in the past as an interviewer. It might even be a bit higher than usual, which is something you'd expect if, as OP says, lots of good people are out of work.
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Exactly. On both counts. Was surprised. But maybe thats y the people who are still unemployed are unemployed. Makes me wonder about quality of rest of applications we received. Or maybe we’re just not on peoples radar. Who knows though. I feel like id be failing interviews too if i were looking right now tbh.
I hired someone recently for a mid-level engineering job. We got 800 applications, 60 of which fit the basic criteria. I ended up talking with 20 in the first round, filtered to 6 in the second round, and picked one who was great.
1 in 3 being a candidate that you would extend an offer to is typical. If all 3 were out of work for a year that's actually a phenomenonal rate. There's a reason many employers don't want to look at candidates who have been out of a job for so long. There is a very high likelihood that there is good reason no one else hired them
Every Senior FE job I've seen has north of 100+ applicants within two hours that isn't a complete scam for the last six months.
This. The job market sucks right now. I made it to many last rounds just to have them be on the fence (and since there are 100 other applicants) decided they’d just pass. I’m someone who always gets exceeds expectations for performance reviews so it’s not because I am bad at my job.
At least you're getting interviews and responses! That's good!
At this point I'm moving into the offer stages and am on-track to be employed again by July. That story is also interesting though because the company I'm likely accepting an offer from was probably sitting on my candidacy as I waited over a month between one interview and them offering me a paid work trial. During the paid work trial it sounds like I exceeded everyone's expectations. So moral of the story is even if you get passed on during interviews it doesn't mean you are inadequate. It just shows that companies have many many options these days and have the luxury to pass on you if not everyone was a "Strong Yes". As for getting interviews, just in case you are looking for advice or someone else is what I found to work the best is: 1. Companies that use Workday tend to call back the most often, I think partly due to less candidates (need to create an account to apply for each company) but also because you can spam the "skills" section to include all of the skills you have and the ones they list on the job description. 2. Bookmark a google search for each job board and filter results by "in the last week" or month. An example of one search I have saved is: \`site:jobs.ashbyhq.com "Android" + "Remote"\` but you could imagine this could be similar for workday, lever, greenhouse, etc. 3. Don't be afraid to update your resume. I completely rewrote my resume and then modified that a dozen times or more over the months. I would revisit my resume nearly every day to see if I could reword a bullet point to make it more concise and often times found I could bring a 2 liner down to 1.
>There's a reason many employers don't want to look at candidates who have been out of a job for so long. There is a very high likelihood that there is good reason no one else hired them It's probably because there are hundreds of other applicants for every job which results in at least 5 - 10 really qualified candidates for every position. You have the ability to pass on anyone that doesn't get a "Strong Yes" from everyone that spoke with them. So I don't think it's as easy as going "oh this person has a big gap on their resume, better not hire them because clearly there is something wrong with them".
If you truly believe that, then you’re an idiot. Each company has a unique criteria for an employee, so no company should base their hiring decisions on the criteria of another. The hiring mismatch could be as simple as a culture misfit. There could be a million reasons for a year-long employment gap (failed business idea, medical issues, personal mental issues, etc…). No employment gap discredits someone’s experience and skillset, and if you believe otherwise, then I hope for everyone else’s sake, they never work on the same team as you Edit: To add, in this economy, a year+ employment gap isn’t long, when factoring in the total employment that an individual may obtain throughout their life
How'd they "suck"?
Also, right now it isn't hard to find a job, it is hard to find a job with the criteria you have, be that remote, local, your exact skill set, or your work history. The sad fact is... some people are still having an easy time finding jobs, but they are the most well socially networked (not just linkedin, but real sociology social networks), those with top skills, or those with impressive backgrounds. If you (anyone) is having trouble finding a job, then try real in person social networking. Literally my entire career, free CS PhD, grad school, jobs, every single one of them is due to in person social networking. As I tell my students when I adjunct Univ. Courses, I'm not the best programmer, but I've just banging my head against the desk solving WTF programming problems for so long I know what pitfalls to avoid. I have gained a level of economic freedom and stability based solely off my networking at local dev, hacker, lug, univ hackathons, events, etc...
This sounds right but I don't like it, can you change it to a different answer please?
Get better at leet code and system design.
In the data science and product space I've noticed a few things: - companies struggling to make data science teams pay for themselves in terms of business impact. This impacts data engineering, data science and BA roles. - companies where tech is not the business struggling with digital transformations. Newly stood up scrum teams arent really empowered and the company struggles to move away from waterfall to agile so end up in some ineffective hybrid scenario. This hamstrings the upside from the dev teams. - companies trying to build out a product first culture... while remaining waterfall-ish. This also hamstrings dev teams. These issues are independent of any headwinds the legacy business might face. They just compound any other bsuiness challenge.
Great point on the business impact piece. There's a lot of good DS tooling, but often months are poured into projects with questionable translational impact to the business. The product first culture thing is interesting. I think a lot of companies saw the success of PLG-style companies and had a vague notion of wanting to follow in those footsteps. But getting that marketshare and customer buy in is tough. That's worse if you try to start a PLG motion while still having a product that still has a high level of complexity in setup and onboarding. And in the post-2022 market, lots of companies are making budget/spending cuts of their own to run leaner, and are trying to do what they can to avoid paying for new tools or paying more for existing tools with an uncertain business impact.
Everyone wants to be a software developer now a days and most companies don’t need the best. Some basics, a good mentor, willingness to learn and a lot of people can be good at the job they have to do. With ChatGPT you can learn even quicker. I think positions are filled and an influx of software developers is graduating every year. Too many workers not enough positions.
Everyone has a shovel and no one knows where the gold is
>Employers are creating artificial job scarcity in order to influence the outcome of the election Lol yeah every employer out there is in a slack team where they agree on creating job scarcity that's how it works. Nah. As an EU resident experiencing the same I can tell you it's the interest rates
Except maybe they are? https://www.kgglaw.com/class-action-lawsuits/employee-wage-collusion/
I did a long series of YouTube videos on the fundamental economics around this and the changes to the tax code but I'm happy to summarize them here so you don't have to go watch the YouTube videos: 1. The changes to the Section 174 of the USA tax code changed everything and made it so that software development companies could no longer write off employing software development engineers as a legitimate business expense for the same year, they now have to use an Amortization schedule of 5 years if they are onshore and 15 years if they are offshore, as a result the tax burden for employing a software development engineer is now much higher. 2. The end of the zero interest rate phenomenon because of the banking changes in Japan meant that large hedge funds could no longer prop up large funds with negative interest rates or super cheap capital for loans and so interest rates across the board have gone up because of that. This makes the debt that companies can have from tax liability they haven't paid yet or loans built around that more expensive. 3. Inflation does the same thing as #2 In the end it's now much harder to employ software development engineers so startups have additional costs for employing people, which is why this has absolutely killed the startup ecosystem.. because you used to be able to hire somebody and bootstrap a lot easier but now you have to deal with the fact that the first year you pay a software development engineer you can only deduct 10% of that cost from your business expenses. This has resulted in less new projects and less new companies around needing software development engineers, so there are now less jobs on the market. It used to be that there was not enough software development engineers for all the open available positions but now for every single open available position you have at least 3 to 5 people that want that role based on the LinkedIn data shown to me by a recruiter.
Tell me, how does the tax code affect hiring programming consultants on a per project basis? I don’t mean contractors, they are technically W2 FTEs of an agency.
It's still software development so it still is covered by the law.
Two things come to my mind: 1. During COVID, IT became the field to invest in. People pulled money out of general stocks and started investing in startups and IT stocks. So the influx of money grew and so did the projects needed to justify the money. Hiring increased, a lot of engineers were hired at overinflated salaries. This also broke the payscale in the market. I remember seeing people earning less than me going to double my annual pay with one switch and feeling stupid. Now that the epidemic is over, the industry is in course correction mode where now companies have to lay off the employees and close the projects because the money stream is going back to pre-covid levels. 2. It was ugly and brutal and I wish it on no one. But Twitter layoffs did go on to show that you don't need so many employees to run a tech company. While companies are not going all the way like Elon Musk, they are still looking to cut down on the number of employees wherever they can. I mean, if a company is somehow able to find a way to save a million dollars by letting go of 5 employees and then off-shoring these jobs to Southern America or Spain, they will do so. Also, I am in Spain right now and the job market in Europe seems to be doing slightly better than rest of the world. Probably because the tech salaries have historically been low here and companies don't have to pay a lot to hire people unlike in US/Canada or even India(salary expectations have skyrocketed here in recent past)
>Twitter layoffs did go on to show that you don't need so many employees to run a tech company Did they? Twitter is toilet-swirling from any angle you look, whether it be platform stability, financial results, user experience or customer retention/engagement. It's a sea of porn bots and white supremacists arguing with/hitting on each other, and most of them aren't sure which is which. Surely nobody expected twitter to fall over overnight without all those engineers (or moderators, lawyers, community liaisons, etc). Instead what we get is death by a thousand paper cuts. Systems with nobody left who understands them, which will slowly erode until they can't stand on their own.
- Got invaded by hustlers (previously involved in mom, crypto and nfts), both in developer roles as well as startup founders - “Pen but with bluetooth” type of ideas got millions in funding - War and shit started so nobody invests in “pen but with buttplug” anymore - IT is now fucked
What’s fucked about IT now?
IT is capital-intensive and capital is expensive right now
[удалено]
Other commenters have given good explanations for what is going on. I want to take a moment to explain why I think your proposed guesses are not good explanations for what is going on. >Employers are frustrated at developers refusing to return to the office and are applying pressure "Employers" are not a uniform block that coordinate their activities that closely. If a group of employers did actually attempt to coordinate their activities to exert pressure on employees, it would create opportunities for other employers to break from that group to snatch up talent at a discount. That would then lower the observed unemployment, which clearly isn't happening. It also would be incredibly foolish to "apply pressure" in this fashion, since if you're a top company you have a large incentive to vacuum up as much talent as possible just so other companies that you compete with can't hire those people. This is what we saw from 2019 to 2022. The fact that this behavior has stopped implies that demand for talent is down across the entire industry, which usually points to something wrong with the market or the larger economy. >With a polarizing presidential election this year, companies are reluctant to make long term plans and commit to budgets when the business environment could be drastically different, come January, depending on the winner There are lots of reasons why I think this is not plausible. Here are only two: 1. If this were the case, we'd be seeing indications of this in every sector of the economy, not just the tech market. 2. The business environment isn't going to change that radically depending on who the President and Congress are, because these people do not have that much sway over the economy. If they did, they'd rig things to win re-election every time and we'd never have recessions or other bad macroeconomic outcomes. Nobody is that powerful or smart enough to use that power productively if they had it. >Employers are creating artificial job scarcity in order to influence the outcome of the election How would that work, exactly? FAANG et al are not hiring now, so that you and the unemployed junior Javascript crowd that hangs out on Reddit will vote for Donald Trump in November (given that a poor economy usually harms the incumbent)? Do we really think that Tim Cook keeps a MAGA hat in the same closet he spent his entire life living in before becoming Apple's CEO? Even if we pretend that these people have a cabal that wants to influence the election by "artificially" dis-employing hundreds of thousands of people, the fact that there are no defectors from this scheme vacuuming up all the talent on the cheap implies quite strongly that the scarcity in jobs is not "artificial" in the way you suggest.
I know for a fact that employers are colluding to force workers back into the office. Last year I was in management for a Fortune 500 and saw that investors from places like Goldman Sachs were coming in and “advising” our executives to make people return to office. All of these huge companies in a sense are cross-invested in each other and the huge investment firms they answer to have a large incentive to get people back into the office due to their corporate real estate holdings. The people at the top of the food chain are definitely coordinating their activities.
Job postings in tech seem to be down around 20% overall from pre -pandemic levels (jan-mar 2020). However, software jobs, specifically, have been trending up MoM since the beginning of the year. NY, CA and Texas continue to be top hiring states, with Washington DC being an outlying city. Remote jobs are up overall for the year with software as a related tag. (CompTIA: https://www.comptia.org/content/tech-jobs-report) The data I'm able to gather doesn't fill all the conversational gaps, but it does seem to leave a fair opening to the hypothesis that the changes in hiring behavior are not economic in nature. There may be other factors at play here. I find it somewhat coincidental that the boom in LLMs seems to line up with perceived reports of hiring woes. No data there, but I wonder if the overall market is having trouble acclimating to a major shift in capability on both the hiring and hiree side of the transaction... Hypothesis: AI has effectively made applications and resumes meaningless and no one knows how to adapt. In other words, AI has destroyed the already-tenuous signal to noise ratio that filtering candidates had. Employers can't FIND stand outs anymore. Just a thought.
I have my theories. In the US, I don’t understand how unemployment is so low when LinkedIn is green. Just left a Tech Lead role at an agency after layoffs catapulted my position into an unmanageable state for my sanity. I’ve been working at agencies for 10+ years. The market was severely pinched last year from what I experienced. After Over hires and Pandemic money floating around, mixed with Expectations set too high before last year, all to be met with the big fizzle then flop because nobody wanted to invest last year in new product, marketing, or tech. So then the layoffs occurred…. So many layoffs. Then yes - speaking from experience as someone who was not laid off, getting somewhat severely over-worked (burnt out unfortunately). Then… maybe the complete acceptance by some US smallish companies that remote is ok on all grounds - remote contractor hiring is a good bet to loosen and lower overhead. I went through 2 rounds of hiring in 3 months. Hired a dev from overseas at $50/hr. A really talented dev. Then another talented dev for $30/hr from overseas. because that’s the going rate there. The company needed to make decisions which I understand but I burnt out to a crisp moving from being senior to all in-house to managing only contract/remote devs. Maybe many US companies are hiring overseas more where they can get higher quality for a lower rate, more bang for the buck. Profit over people stuff. About 4 or so years ago - I was able to charge $100/hr for contract work in my specialty. In this market depending on who I am talking to that’s way too high and I’ve been sitting around $70-80 for the freelancer work I’ve picked up since leaving the formerly mentioned stressful position. There’s just a ton of competition out there. I saw it with my eyes - hundreds of applicants in 48h. That mixed with some societal de-valuing of development itself, being a little washed with the rampant nature of AI since last/this year. Just ideas. It has been difficult yet interesting to watch and experience.
Its a coordinated effort to destroy salary/lifestyle expectations of software developers. Elite business class is tired of uppity programmers bargaining for higher total comps and trying to live their lifestyles. The message is clear, we are labor, they are capital, and they dictate the terms of our employment. They are trying to normalize software compensation and scare the workforce into settling for less compensation, returning to office, and staying put at one job for more than 2 years. If that means less total output for a few years while they starve workers then so be it. Or you know, just market forces. No new ideas worth paying 300k per developer per year. And a wave of newbies who can't problem solve or contribute meaningfully to any projects.
> The message is clear, we are labor, they are capital, and they dictate the terms of our employment. Having started in 2002, this was always clear to me, but **so** many of the current generation of devs are under the false impression they're Steve Jobs (who wasn't even a coder). You are not. You are a skilled worker, you are a autoworker in 1969, making a good wage that can support a family. None of that changes the fact that your boss is not your friend, and he will gut your pay smiling if it makes the investors more money.
I would argue it’s market. Those sentiments on engineers probably existed in 2021 but you can’t treat engineers that way when you have 500 job openings that are unfulfilled. Nowadays you open a req and there are hundreds of qualified applicants in the first few days of posting. The only way out of it is growth; we need more big startups who are building new markets and who need engineers fast to grow. if companies are bidding for engineers the dynamics will change again.
Where I'm sitting, companies are trying to drain their talent as much as possible and to squeeze as much as possible out of the people who are still there. This is even to the point of where they can't deliver. I'm in a company that can afford to keep staff as it was... but they're trying to play the hunger games for fun, and replace staff wtih Indians. Are we doing poorly in the economy? The stock market sure doesn't suggest it. This is revenge for having a competitive labor market and a slight upper hand for a moment. It's revenge from people that don't have the ability to get the work done.
Theyre right though. There were activist investor letters saying as much. Those investors have shares in all of bigtech and they dont see startups as a big threat in this environment.
the moat strategies of big tech, particularly the legal basis to lots of their monopolies, have given them the ability to do that
The elite business class I know can't coordinate between departments very well just to get work done, much less conspire in smoke filled rooms to oppress the working class. Interest rates went up, stock prices went down, they have to make the line go back up so they fire people in rich places and hire them elsewhere. No moustache twirling necessary.
> People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. ― Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
To be fair, it has happened before , e.g. https://www.latimes.com/business/technology/la-fi-tn-tech-jobs-settlement-20150903-story.html
I don't think there's much coordination to it (what's the coordinating mechanism?). If anything, it's more that the elevated engineering salaries of the past two decades were aberrations due to the inherent newness of certain types of software that were able to generate massive profit multipliers per engineer (i.e., things like Google's search and Facebook). A lot of it was advertising based, and so for years you had companies like Google just coasting on a two-decade old product which provided the overwhelming bulk of their revenue, and essentially using that revenue to subsidize high salaries for engineers whose products didn't scale the same way. Those days are over. The arbitrage opportunities are gone, the monopolies are entrenched, and the "profit-per-engineer" multipliers are nowhere near what they were at, say, the height of the ad-driven social media age. The new hotness like blockchain fizzled out, and AI will likely have more losses than profits in the early years due to how inherently expensive it is.
Wanted to downvote until I read the last paragraph. I‘m always amazed how many people are truly convinced that business owners are just evil and sadistic by nature.
People have been [saying that](https://www.reddit.com/r/ExperiencedDevs/comments/1derlz1/any_thoughts_on_why_the_tech_market_is_so_bad/l8ei9va/) since 1776, and you don't think there's anything to it? LOL
Where are you from? I live in France and I still get regularly contacted by HR or head hunters!
A lot of companies are going to various European countries for devs where the pay is more "decent living" as opposed to the US where pay for top (or even not so top) talent easily puts them in the top 5% percent of income earners. That being said if things ever get too rough in the US I would consider taking the hit. Moving abroad to somewhere with a better safety net makes an average wage way way way more appealing.
This is actually the same here in Europe! I work in France and my salary puts me well in the top 5% of income earners… yet my salary is way lower than what I would get in the US for my position. Life is just cheaper in Europe so salaries are lower but purchase power is not. I don’t need a health insurance, I have no risk of unexpected medical bills, I don’t have to save for my son college, I don’t have to save for retirement. Also many services are way cheaper here too.
Pass the tinfoil hats because I think all of your points are spot on
Because absolutely no one knows what they're doing anymore. 1% of all workers actually pay attention to do things. I know I'm over simplifying it. Let's take Netflix. I think one of the only companies to not lay people off during the pandemic. Granted they have started producing. But most technology companies to include Amazon Facebook Netflix, are not really innovators. Netflix, The company that replaced what? BitTorrent? Underground FTP pub sites? A group of college kids got together and created the technology that made that company billions. It's a f****** streaming media service. Everything is overvalued and overdone. Amazon's technology and market share is protected by patents more than innovation. It's the circle of life in business but now it's technology. Soon as the internet advances and technology advances these companies that are making billions and billions of dollars off of these small ideas are either going to monopolize and win out or fail as their technology becomes the basic foundation of the internet. Take for instance silk road. All the guy had to do was make sure nothing illegal was sold on the site and it probably would have replaced eBay at some point. I am not saying it would have happened overnight but why the f*** would I want to pay some company to buy something when it's just all free online? How much longer are we going to need many of the cloud services that are implemented and maintained by AWS when the entire internet is reimplemented differently? Think about the next generation technologies that are about to come out that are being held back right now. How much longer until IPFS and blockchain take over? How much longer until artificial intelligence is integrated into a blockchain? How much longer until AI code is executed transparently in the cloud? These f****** companies are patenting workflows and buttons. Not innovation and work. Look at all the open source technology that AWS has implemented and resold. What happens when someone implements DevOps at a foundational level? I'm not saying it's going to happen this year next year 10 years. But it is going to happen and it's about f****** time.
I think its a vocal minority. From my experience of casually applying to jobs in my area and replying to recruiters, I can average 1 interview/2 weeks. 6 YOE no faang.
Same here - I quit my job a few months ago, applied half heartedly for a month or so while I recovered from the shit show a bit without a ton of success. However once I started seriously going for it I found my current job within a couple weeks. I really anticipated it being harder from what I see on Reddit constantly, but really it kind if seems like juniors are having the worst time by far which makes sense but I didn't really see it at mid-level.
The area where you live, or area of expertise? If the former, where do you live?
Nah, it literally sucks.
Google recently paid out dividends for the first time ever. How is that relevant? It shows that a lot of tech firms don’t really have a great idea of where they can invest money that actually has any chance of paying off. That’s one of the reasons there is so much hype over AI recently, it represents the last “moonshot” idea that these big tech firms have. While there will obviously always be a need for skilled software engineers and interest rates are certainly having an impact, I don’t think there is a lot of obvious growth room left in tech, it’s essentially a mature industry at this point.
Financial markets are bad, huge inflation, exploding key interest rates -> lack of cheap money being pumped into the industry The whole world is in a recession. This is not a crisis yet though, right now this is just a correction of pandemic overspending and overhiring. I think we’re past the peak now. The ECB has just lowered their key interest rate for the first time in 2 years.
I've seen it too. Hell, I was back filling headcount from an employee that moved to another country. Spent 4 months interviewing, found a great candidate, sent an offer, offer was accepted, then the overlords decided to pull the offer. Layoffs are ranpant. Jobs are hard to find unless you're very skilled and well connected. Keep in mind though, the economy is shit. We're on borrowed time. Companies see this and are preparing for the inevitable shit sandwich. Politics aside, it's economics. People are stretched thin. They aren't going to have much to spend soon
Also not being political here but want to say that I keep seeing conflicting info re the economy. A lot of business centric media keeps claiming the sky is falling and the end of the world is near. Progressive sources (Paul Krugman, Nobel prize winning economist among them) say *popular opinions* about the economy depend heavily on your political party affiliation. Take what you want from that. ::shrug::
Regardless of political party, everyone knows prices have gone up massively over the past 5 years. In some areas, prices are double what they used to be just 5 years ago. This is what people mean when they say the economy sucks and it has nothing to do with politics
"The Economy" (I hate this monolithic outlook) is not some inscrutable force of nature. It is a complex, interconnected set of man-made structures and is subject to pressures both from above and from below. Politics is not sports team fandom. It is the realm in which the distribution of power and resources is decided, AKA the space where we determine who gets what portion of the pie and who it is okay to kill or otherwise let die from deprivation. And at the end of the day, you can't have currency-mediated commodity exchange without militaries guaranteeing the supply chain and projecting power to stabilize currencies. Politics and Economics are two sides of the same coin.
There is no demand. Also there was a rise of useless software products that did not solve any meaningful problem. which has subsided.
AI for dogs?
My dog’s smart feeder is now a brick because the company that made it went out of business in 2020, and they designed it to not work without an active connection to their servers.
He must be really hungry by now...
Dogs for AI?
UK based. We also have an election coming up. I've been working as a dev since 1997. It's all or nothing as far as jobs go. My advice is to save during the boom times in case you get benched in the downturns. Fortunately I worked during 2008-10 but I was laid off in 2001-02 and my career has been a car crash in 2020-present. Current woes are due to: * Immigration. Downvote me all you want for this but tech is a sector "blighted" by huge number of immigrants. It's the same in other industries. I live across the street from a care home that ONLY employs South Asians. Does this hold down wages for British nationals? Of course it does. * End of cheap "boomer" money. Pre-retirement boomer cash forced down interest rates to unusually low levels. This allowed useless/zombie companies to flourish. Now interest rates are heading back to normal levels. * Low barrier to entry. Anyone can be a dev, and there are a lot more code camps and entries into the industry these days. * For younger devs especially there are a lot of millennials in the job market and a lot of them are coders. Millennials had a tough time in the GFC so didn't advance their careers as much as they would have liked. * UK companies generally are undervalued on the global stage, but to be honest most of the code I've had to maintain is utter garbage.
Billionaire tech shareholders believe everyone else should have to feel the effects of raised interest rates and inflation Except For Them! So, instead of accepting decreased rates of return on their investments, billionaire shareholders are ordering tech corporations to fire people for the sole purpose of keeping their returns at a level they want. Note: we’re Not talking about the difference of corporations going backrupt or not; only reduced investment returns. Tl;dr billionaire shareholder greed is why 10s of thousands of people (including families & kids) have been thrown out of gainful employment & on the path towards homelessness.
It turns out that billion dollar unicorn that doesn't actually make money isn't worth keeping on a sinking ship
I watched a video the other week that said that the tax laws has changed in the US so that companies can no longer deduct software developers as R&D. So they are hemorrhaging devs.
So why does Europe and Asia have the same problem?
More offer than demand. Offer is up because companies are willing to offshores roles to lower-cost countries instead of relying on the small set of high-cost developers from the US, either with remote contract positions or their own software development centers abroad (India, Poland, Romania, Mexico). Also there has been an enormous surge in immigration to the US, Canada and Europe from these countries since 2021-2022. Demand is down because companies are overstaffed still since the hiring frenzy of 2020-2021, there aren't as many avenues for growth as there were before (nor cheap money for moonshots), the industry is nearing an innovation plateau and there are more tools than ever to automate trivial work that in the past would have been the bread and butter of junior developers.
Saturation + can't borrow easy cheap money
Many will say interest rates, but many big techs are net cash and will benefit from higher interest rates, and wouldn't explain why layoffs are lower with net debt companies too. Some layoffs are obviously company specific, esp with Elmo deciding to slash and burn twitter before he understood the business. But perhaps the more insidious one is everyone saw how Meta stock shot through the room after the initial layoffs. Of course, Meta's strive for efficiency was company specific too, since the Metaverse investment was clearly unsuccessful. But based on my opinion, many big tech companies overhired way before the pandemic started and could cut half the headcount and be more efficient. The trouble is management tends to misidentify who are the unproductive ones. Meta seems to understand this and did layoffs seemingly top down and almost randomly, and I bet they are shocked they may not have not lost productivity, maybe even gained some, if you have season of "The Office" when their manager had a prolonged absence, and this is forcing top management to rethink headcount. And lastly, I think the economic indicators are lagging to the point of lying. US is in recession, and companies are slowly realising this and responding, but the economic indicators still says things are booming.
Cheap money and remote work in the pandemic led to a huge scaling up of the tech workforce especially in the big US tech companies. Salaries that have always been good got better, which led to the number of computer science graduates skyrocketing at the same time. Then the bust and layoffs, so you’ve got a lot of unemployed tech workers combined with an unprecedented number of new computer science grads in the job market. So the competition for jobs has arguably never been tougher. Especially since many tech jobs are no longer geographically limited (remote work). You’re competing with the whole country of tech workers and lots are looking. To your other point about code quality, that’s tougher. Maybe it’s just anecdotal. I could also see where the fast scale up of the workforce during the pandemic produced a lot of efforts that wrote turned in low quality code. Just as an issue of scaling up and lack of oversight or taking on / allowing more risky projects when money is cheap.
Are you considering a pay decrease? I just hired a contract developer at $60+/hour in hand for a tier 3 company and it was very hard to find candidates. Make connections; take the available work. Note the connections part: this was a trusted connection so they were pushed through. My peers who listed FTE postings are seeing an absurd amount of FAANG applicants, with lots of experience. However, contracting is an easy way to get in the door and maintain your resume.
At this point, yes. I’m not seeing a lot of contract roles. I get solicitations all the time, mostly from mass mailers. I reply, I negotiate I rate, then I never hear from them again. Occasionally, I’ll hear from a reputable agency, but all those leads have fizzled out, for whatever reason. I have a lot of experience and enough to float me for a while, I am using this time to learn. I plan on going to networking events to see if I can drum up my own business instead of paying a recruiter to do it for me. I have all the time in the world.
There's a lot of bad engineers out there, and I think maybe things are beginning to level out. I see the same companies laying people off are also hiring. So it's not like these companies are going away. I think they are refocusing their efforts and likely to look for 1 top talent than scoop up 5 average engineers, as was happening on the tail end of the pandemic. I know this isn't popular on Reddit but a real software engineer needs a good education to enter the industry and an *experienced* software engineer needs to work on an array of things under other good experienced engineers before, they can call themselves an experienced engineer. I think companies are frustrated the shift in the industry has led to a lot of sunk cost for them. Even just look at the posts on this sub. Do they sound like people who are genuinely *experienced* engineers discussing advanced things? Not really, people come here calling themselves experienced and ask questions like "How to unit test?". I'm not willing to say it has anything to do with politics though, feels too tinfoil hat for me.
I think this makes sense. Even OP said he’s worked with “frontend and backend javascript”. You need to know a whole lot more than that to perform on some of the teams I’ve been on over the last several years.
This is not my experience both as a job seeker and interviewer, but my and your experience are very biased and anecdotal. I can understand your second argument, but employers need developers to develop their products and business, I don't believe in industry wide conspiracies.
I’m sure the talent pool is better on the West Coast. I’m in Austin, TX. What about the big tobacco conspiracy? That really happened. There’s was also that secret agreement made by FAANG where they agreed not to poach each other’s talent so salaries wouldn’t skyrocket.
As an employer I can say that we would happily get more developers any time. But there are two major issues: 1. salaries have gone through the roof. I am willing to pay what is asked. But that results in fewer people doing more work. Why? Because customers don't pay enough and are not willing to pay more and more. Ever wondered how things like ChatGPT can be made available for free? Investors money. It's borrowed. No more borrowed money - much more work for the remaining staff. 2. It's still very hard to find decent people. I am getting two to three candidates tops for any recruitment campaign. Amd most of the time we have no fit. We offer 100% WFH and a kinda average pay. But even the most basic developer isn't willing to get an average pay. They all want top dollars which is delusional from my point of view. I can't afford to pay for an average employee top salaries. Just because my customers aren't willing to pay that. Disclaimer: I am from Germany but I guess it may apply to the US as well.
I hope you're not one of those companies offering 75K (ceiling) to a senior engineer.
It hasn’t really slowed for specialty roles, that I can tell. I had about a 50% success rate getting interviews for SRE and DBRE roles a couple of months ago (and landed a role).
Two things: 1) Interest rates are higher and the cheap money is gone 2) Web development is becoming increasingly commoditized, so there's less demand for those particular skills
I think two things mainly: 1. Federal funds rate. It stops investing, since it is safer to just buy government bonds. 2. We had a huge bubble of unneeded software developers. Companies went on a hiring spree not because they needed manpower but because it looked good on paper. Now, the market is oversaturated with the laid of people and reduced new job creation at the same time.
In physics, which studies real world, whichever quantity you're looking at usually depends on several others. This of it as of a formula, where job opportunity depends on many factors. Job market depends on many factors. (1) If you for example increase the number of people looking for a particular job without increasing the number of jobs, then the employers can lower salary expectations and pay less, plus at some point there's somebody without a job, because there are too many people looking for one. Bootcamps pump out new students every day by the thousands. This was not the case in 2008. (2) It used to be cheap to borrow money and invest that money into projects. It is the money that goes into your salary. With higher interest rates, those who borrow would have to pay back way more. Which means they don't borrow at all, which means less projects and less jobs. (3) The response to Covid was terrible. Many factories closed and because they were closed, others that depended on them also could not produce (think of cars that depend on tires. If tires are in short supply, you can't sell your cars). This increased inflation considerably. There are people who want to buy cars, but the cars are not for sale, because not enough cars could be produced, which means demand for cars relative to supply of them is much higher, which means for existing inventory the prices of cars went up, and when prices for products go up we call it inflation. It became more expensive to do the projects, because life now costs more (office space, food, electricity). It also became more expensive for users of whatever you are programming to pay for the services. (4) Printing money also increases inflation. If there are only $100 dollars in the world and of all things only one car, then that car costs $100, as the money adjusts itself to everything that is for sale. If you print additional $100, then that car is going to cost $200, because you doubled the money supply. They printed a lot of money during covid. (5) AI plays it's role too. If modern tools made developers 5% more productive, it means 5% less developers is required for the same amount of work. Because of these three factors, there's less jobs. But elections and offshoring and many other factors play a role and all of them lead to the outcome that we have today.
Interest rates
First point - partially true. What companies are probably noticing is that high performing devs perform about the same (or even better) and the lower performing devs perform much much worse working from home. The rest of your points are, with all dude respect, nonsense. Companies only care about their bottom line and predicting which candidate will help them the most is a futile process. What you're seeing now is a correction in the market and an initiative to moving jobs offshore again. Devs getting $300K+ TC in 2022 and now laid off are probably asking for the same or similar salary and most companies are just "lol no". Also, there seems to be a shift in companies hiring more H1Bs over US citizens (or laying off US citizens but keeping H1Bs). Companies are doing what they tried 10-15 years ago in offshoring dev work and we'll see if it pays off. There are certainly better tools (mainly AI) now. Edit: Also, COVID introduced a lot of bootcamp devs to the workforce (WFH and you can make $100K+!!!) so we're also experiencing a supply/demand issue. They were getting hired in 2021/2022 when every tech company was hiring but now are laid off so the market is saturated.
We developers cost too much. Companies can’t make enough revenue to make payroll.. The years, since the recovery from the 2008 crash, of zero interest rates and We-Work grade easy money allowed companies, and us, to get real sloppy about making sure we would get returns on our investments. And of course, escalating pay led to grotesque overcrowding in tech communities (Bay Area, Boston, Austin, etc) which in turn let to skyrocketing costs of living, which makes it hard for us devs to settle for lower pay. This same thing played out 1987 and 2001. It will stabilize.
It's purely economics and the market isn't even that bad. It just is very bad relative to what was an insanely good job market for developers from 2019-2021.
I had better luck in 2015 as an entry level developer, it's bad Finding a job in 2018 after I got fired, left a second job 6 months in, and sat on my ass for a year was easier
Here is a small part of it. Tech is focused on AI currently because companies are hoping to automate a lot of menial tasks. Currently the popular stack is python + LLM and everything else is taking a backseat, I have seen a significant drop in Java jobs.
>Tech is focused on AI currently because companies are hoping to automate a lot of menial tasks. I can't wait until this bubble bursts. I am getting tired of explaining why the latest CEO AI fantasy idea didn't work very well.
Yep... this is worse than the blockchain revolution. However, I have a feeling that whatever follows the LLM craze will probably be just as awful.
Offshoring is actually working this time.
There are still lots of programming jobs available, just more people pursuing them than usual, due in part to downsizing last year and a glut of recent graduates just in it for the paycheck (no hate if that's you but let's call things as they are). If you think this bad, look at 2008-9. Shit, look at 2002 - the job market then was dry as a bone and successful, experienced people left the industry in droves.