Software engineering job openings hit five-year low?

Gergely Orosz reads Indeed’s job-posting index and finds software developer vacancies at 65% of their January 2020 level, 3.5x below the mid-2022 peak, in a market where total job postings across Indeed are up 10% over the same period. The US and Canada track almost identically; the UK, France, and Germany show similar drops, while Australia is the one country where postings haven’t fallen below 2020 levels.

He walks through several candidate explanations rather than settling on one. Section 174 (the 2023 US accounting change requiring software engineering costs to be amortized over five years) correlates with the timing but can’t be the main driver, since it doesn’t apply outside the US and the UK shows a similar drop anyway. The end of zero-interest-rate policy explains more of the macro picture but doesn’t by itself explain why profitable Big Tech companies have slowed hiring or run layoffs. AI productivity gains, a hiring hangover from the 2021-2022 overrecruitment boom, and a shift toward smaller, more efficient engineering teams (Linear at 25 engineers, Bluesky at 13) round out the list, alongside a caveat that Indeed’s own crawl coverage may undercount postings, especially at companies like Microsoft.

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• Indeed-tracked software developer vacancies: 65% of January 2020 levels, down 35%; 3.5x fewer than the mid-2022 peak; 8% down year-over-year as of the article’s data.
• Cross-industry comparison for the same 2020-2025 window: all jobs +10%, banking and finance -7%, sales -8%, marketing -19%, software development -34%, hospitality and tourism -18%. Software dev had both the biggest 2022 boom and the steepest subsequent bust of any tracked segment.
• Sectors that grew instead: construction +25%, accounting +24%, electrical engineering +20%, against +10% for all jobs combined.
• Section 174 (US accounting rule requiring software engineering costs to be amortized over five years, effective 2023) is ruled out as the primary cause: its effects would only show from early 2024, the drop starts in 2022, and it has no jurisdiction over the UK or France, which show similar drops.
• Zero-interest-rate policy (2008-2022, the longest such period in the US) is framed as the biggest single macro driver, tied to the fall in VC funding and startup hiring, but it doesn’t explain slowed hiring or layoffs at highly profitable Big Tech firms.
• Salesforce is cited as keeping engineering headcount flat while citing a 30% AI productivity gain, while simultaneously hiring 1,000 more salespeople, read as a sign that AI gains may be real but the company still needs sales capacity to move the resulting output.
• Cited case studies for lean teams: Linear (25 engineers, 10,000+ customers including OpenAI and Retool) and Bluesky (13 engineers, 30 million+ users, one shared codebase across web, iOS, and Android).
• Orosz names three possible futures for the industry: smaller teams getting more productive and spinning up more companies (his preferred, optimistic case), the industry stagnating or shrinking (which he says he can’t see playing out), or AI making non-developers capable of building software, which could either replace developer demand or create new demand for developers who clean up and extend that AI-generated code.