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Comment by elevatortrim | Hacker News Reader

I do not see anything in this study that accounts for the decline in economic activity. Is it AI replacing the jobs, or is it that companies are not optimistically hiring, which disproportionally impacts entry level jobs?

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Agree, I think the high cost of full time hires for entry level software jobs (total comp + onboarding + mentoring) vs investing in AI and seeing if that gap can be filled is a far less risky choice at the current economic state.

6-12 months in, the AI bet doesnt pay off, then just stop spending money in it. cancel/dont renew contracts and move some teams around.

For full time entry hires, we typically dont see meaningful positive productivity (their cost is less than what they produce) for 6-8 months. Additionally, entry level takes time away from senior folks reducing their productivity. And if you need to cut payroll cost, its far more complicated, and worse for morale than just cutting AI spend.

So given the above, plus economy seemingly pre-recession (or have been according to some leading indicators) seems best to wait or hire very cautiously for next 6-8 months at least.

Even then why hire a junior dev instead of a mid level developer that doesn’t need mentoring? You can probably hire one for the same price as a junior dev if you hire remotely even in the US.

"I think the high cost of full time hires for entry level software jobs (total comp + onboarding + mentoring) vs investing in AI and seeing if that gap can be filled"

I think it's more to do with the outsourcing. Software is going the same way as manufacturing jobs. Automation hurts a little, but outsourcing kills.

Knowledge workers aren't fungible, and outsourcing them always fails.

The numbers say otherwise. The US is outsourcing about 300k jobs annually, with about 75% of those being tech. The trend has generally increased over the past decade.

A lot of big tech companies are being very opportunistic and reducing hiring/laying-off under the guise of A.I. but really it's weak economy.

Or H1B / outsourcing replacement. There are data points showing tech companies hiring thousands of foreign workers while layout off domestic employees. It should factor in to these analyses of displaced junior developers.

The usual outsourcing capitals of the world also report considerable job losses.

That stands to reason...the human labor per line of code is plunging...my own delegation to overseas engineers is way down.

Exactly this. 2023Q1 was when the interest rate hike from the previous year really kicked in with full force. It was the first hiring market I ever saw in well over a decade where the employers were firmly in the drivers seat even for seniors.

I can imagine that there were a decent number of execs who tried chatgpt, made some outlandish predictions and based some hiring decisions upon those predictions though.

This paper looks kinda trashy - confusing correlation with causation and clickbaity.

It compares AI-adopting companies with non-adopting firms, so that should account for the overall economic scenario.

Did tech reduce hiring after Section 174 R&D tax policy changes?

From https://news.ycombinator.com/item?id=45131866 :

> In 2017 Trump made businesses have to amortize these [R&D] expenses over 5 years instead of deducting them, starting in 2022 (it is common for an administration to write laws that will only have a negative effect after they're gone). This move wrecked the R&D tax credit. Many US businesses stopped claiming R&D tax credits entirely as a result. Others had surprise tax bills.

Then companies bought their own stock instead of investing in labor:

"S&P 500 Buybacks Now Outpace All R&D Spending in the US" (2019) https://news.ycombinator.com/item?id=21762582

People just want the same R&D tax incentives back:

"Tell HN: Help restore the tax deduction for software dev in the US (Section 174)" (2025 (2439 points)) https://news.ycombinator.com/item?id=44226145

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