Technical jobs are not coming back

• Tech companies are cutting thousands of jobs.
• Thanks to the rise of AI, many of those jobs will never come back.
• This has long-term implications for tech workers and those who want to work in the industry.

Big Tech likes the look of its new slimmer form factor.

Companies from Meta to Microsoft to Salesforce have cut jobs in recent months. By some estimates, more than that 250,000 technical personnel Decommissioned from the beginning of 2022.

These industry giants have been slow to hire, leaving many roles unfilled. Latest data Software-development job postings show a more than 50% decline from a year ago.

As my colleague Hasan Chaudhary wrote, Strategy works financiallySalesforce, Meta, and Microsoft recently reported stronger-than-expected earnings results.

Now, thanks to the rise of AI, even as these companies grow again, many of those jobs may be lost forever.

“AI-based productivity drivers are coming,” the bank said in a recent note from Morgan Stanley analysts led by Brian Novak.

The note reads:

We’ve seen headcount reductions across the technology landscape. But part of this (especially META, GOOGL, AMZN) is a countermeasure to above-average hiring levels in ’21/’22. Looking ahead, we are more focused on how organizations plan/talk about hiring growth going forward. Hiring positions going forward will need to be smaller and more targeted due to rapidly evolving AI productivity drivers.

A Morgan Stanley note noted the potential of AI-assisted coding tools to make engineers more productive, citing a Microsoft executive who said using GitHub CoPilot increased productivity by 55%. It also highlighted AI-based sales tools that reduce the need for large armies of salespeople.

To learn more about how AI can impact software developers, I highly recommend this story by my colleague Aki Ito on “The End of Coding as We Know It.”

To be clear, Morgan Stanley isn’t suggesting that AI will necessarily take tech jobs. Instead, the proliferation of AI-powered tools and workflows will slow or halt future growth in headcount. In other words, lost jobs may not come back or come back very slowly. In the near future, some tech jobs may not even exist.

References to this already exist. At Alphabet, for example, Urs Hölzle, Google’s head of engineering, said in a March memo to technology-infrastructure teams that the company will use automation to “find more efficient ways to do things.”

Insider’s Rosalie Chan reported at the time:

Additionally, the team aims to use automation to reduce the ratio of site-reliability engineers to software engineers to less than 5%. Site reliability engineers manage the operations of Google’s systems and keep them running, while software engineers work on improving Google’s infrastructure and products.

Meta meanwhile has had a broad hiring freeze over the past six months. Chief Financial Officer Susan Li said in an earnings call this week that the company expects to resume hiring after it completes layoffs in April and May, adding that “the long-term focus is more on performance.”

Asked how this would affect worker productivity, Novak said, “That’s something we’re excited about, and I think we’ll have more clarity on that as more tools start to develop across the industry to improve worker productivity.”

This trend has significant implications for tech workers and those aspiring to work in the industry. As Insider’s Ito reports, tech workers and software engineers are often considered impervious to the march of automation.

She writes:

Even as new gizmos replaced other jobs, those who wrote the instructions for the machines felt untouchable. Universities rushed to expand their computer science programs. Policymakers struggling to future-proof workers stuck with an unwavering message: learn to code! But in recent weeks, behind closed doors, I’ve heard many coders admit to a growing concern with the sudden arrival of generative AI. Those who are automating fear that they will soon become automated themselves. If programmers aren’t safe, who are?