AI Won't Replace Engineers, New Data Suggests
Software engineering was supposed to be the most vulnerable job function to automation, but new data from SignalFire suggests the opposite.
According to SignalFire's latest “State of Talent Report,” engineering was the most resilient job function in 2025, with engineers comprising 55% of all new hires in 2025 across the 12 companies SignalFire classifies as "Tech Majors" — Alphabet, Meta, Apple, Amazon, Microsoft, Netflix, NVIDIA, Tesla, Uber, Airbnb, Block, and Stripe. This is a significant jump from 2019, when engineers represented only 46% of new recruits.
While total hiring across large tech companies dropped 25% compared to 2019 levels, engineering roles saw a much smaller decline of just 11%, according to SignalFire’s data. The continued need for engineers was even more evident at early-stage startups, which collectively brought on 7% more engineers in 2025 than they did in 2019.
If AI were truly substituting for engineering talent, Bantock argued, engineering hiring would be the first to fall amid the current tech hiring contraction. Instead, SignalFire’s data shows that engineering headcount is growing faster than most other job functions in tech.
Nvidia CEO Jensen Huang outright rejected the theory that AI will replace engineers. "Somebody said that AI is going to destroy all of the software engineering jobs," Huang said in an interview at the Stanford Graduate School of Business in April. He then argued the opposite is true. Now that all engineers at Nvidia are using agentic AI, "software engineers are busier than ever," he'd said.
Huang added that while agents are writing code near instantaneously, they are constantly pushing engineers to generate “the next idea.”
For now at least, it seems that armed with AI, engineering has become a classic example of the Jevons paradox — the idea that greater efficiency doesn't reduce demand for a resource; it increases it, because the work expands to fill the new capacity. As Bantock said of engineering talent in this moment: "They're suddenly a lot more productive, and there's endless work for them to do."
The Jevons paradox is a key concept in economics that suggests that technological advancements can lead to increased demand for a resource, rather than reducing it.
In this case, the increased efficiency of AI-powered coding tools is driving up demand for skilled engineers, rather than replacing them.
"There’s at least no larger material difference in unemployment rates" between workers who use Claude for the “most central task of their job in automated ways” — like technical writers, data entry clerks, and software engineers — and workers in jobs less exposed to AI that require “physical interaction and dexterity with the real world."*
*Peter McCrory, head of economics at Anthropic, made this statement in an interview with TechCrunch in March.
While some experts, such as Dario Amodei, CEO of Anthropic, have warned that AI could wipe out half of all entry-level white-collar jobs and push unemployment as high as 20% within five years, the data from SignalFire suggests that engineering is not only resilient but also in high demand.
“The rationale given for lots of layoffs is consistently AI, and specifically they'll say AI with respect to code; they'll say one engineer could do the job of however many engineers in the past,” said Asher Bantock, SignalFire’s head of research.
“What we're seeing on the ground is a little inconsistent with that.”*
Bantock's statement highlights the disconnect between the rhetoric around AI replacing engineers and the reality on the ground.
SignalFire's analysis, which tracked the careers of millions of employees across more than 80 million companies, suggests that engineering was the most resilient job function in 2025.
Instead of focusing on layoffs, which are difficult to track because people often delay updating their employment status after job cuts, SignalFire examined hiring data as a more accurate indicator of real-time workforce trends.
While total hiring across large tech companies dropped 25% compared to 2019 levels, engineering roles saw a much smaller decline of just 11%, according to SignalFire’s data.
This trend is evident across various industries, with engineers comprising 55% of all new hires in 2025 across the 12 companies SignalFire classifies as "Tech Majors."
The continued need for engineers was even more evident at early-stage startups, which collectively brought on 7% more engineers in 2025 than they did in 2019.
If AI were truly substituting for engineering talent, Bantock argued, engineering hiring would be the first to fall amid the current tech hiring contraction.
Instead, SignalFire’s data shows that engineering headcount is growing faster than most other job functions in tech.
The paradox is that while AI-powered tools are making engineers more productive, they are also creating a greater demand for skilled engineers to develop and maintain these tools.
This is a classic example of the Jevons paradox, where greater efficiency leads to increased demand for a resource.
“They're suddenly a lot more productive, and there's endless work for them to do,” said Bantock of engineering talent in this moment.
The Jevons paradox is a key concept in economics that suggests that technological advancements can lead to increased demand for a resource, rather than reducing it.
In this case, the increased efficiency of AI-powered coding tools is driving up demand for skilled engineers, rather than replacing them.
“There’s at least no larger material difference in unemployment rates” between workers who use Claude for the “most central task of their job in automated ways” — like technical writers, data entry clerks, and software engineers — and workers in jobs less exposed to AI that require “physical interaction and dexterity with the real world.”*
Peter McCrory, head of economics at Anthropic, made this statement in an interview with TechCrunch in March.
While some experts, such as Dario Amodei, CEO of Anthropic, have warned that AI could wipe out half of all entry-level white-collar jobs and push unemployment as high as 20% within five years, the data from SignalFire suggests that engineering is not only resilient but also in high demand.