We’re seeing a drop in software engineering jobs everywhere. You might think it’s because of artificial intelligence making jobs easier, but actually, AI isn’t always that helpful and can make work harder. People end up getting less done because they struggle with AI systems.
This job drop started after a huge increase in demand due to more people working from home during the pandemic. Now, things are correcting. Some blame high interest rates, but that’s not the full story.
The unemployment rate for software engineers is at 7%, which is almost double the U.S. average for other industries. With many new graduates from college and coding bootcamps, the job market is flooded, leading to more layoffs and less demand. Additionally, salaries for tech jobs are going down, about 10% across different programming languages like Lua, Ruby, and Python.
Even though tech fields like AI and data science use languages like Python and C, their salaries are still dropping. This is because there are more unemployed engineers. As companies focus on their finances, they might put money in risk-free high-interest accounts rather than hire more employees.
This strategy reduces available jobs, contributing to the unemployment rate in tech. If businesses can earn guaranteed returns by parking their cash in safe investments, they’re less likely to hire new staff.
That’s why 1 in 12 software engineers are jobless. The situation could improve if interest rates decrease in the future.