This assumes that the companies' business growth is a function of the amount of code written, but that would not make much sense for a software company.
Many companies (including mine) are building our product with an engineering team 1/4 the size of what would have been required a few years ago. The whole idea is that we can build the machine to scale our business with far fewer workers.
Even in companies that are no longer growing I've always seen the roadmap only ever get larger (at that point you get desperate to try to catch back up, or expand into new markets, while also laying people off to cut costs).
Will we finally out-write the backlog of ideas to try and of feature requests? Or will the market get more fragmented as more smaller competitors can carve out different niches in different markets, each with more-complex offerings than they could've offered 5 years ago?
This is already happening. Fewer people are getting hired. Companies are quietly (sometimes not, like Block) letting people go. At a personal level all the leaders in my company are sounding the “catch up or you’ll be left behind” alarm. People are going to be let go at an accelerated pace in the future (1-3 years).
> We find no systematic increase in unemployment for highly exposed workers since late 2022
It is absolutely likely. The hiring market for juniors is fucked atm.
(And if it is, what is the cause?)
How long have we been hearing about crushing affordability problems for property? And how long ago did that start moving into essentials? The COVID-era bullwhip-effect inflation waves triggered a lot of price ratcheting that has slowed but never really reversed. Asset prices are doing great, as people with money continue to need somewhere to put it, and have been very effective at capturing greater and greater shares of productivity increases. But how's the average waiter, cleaning-business sole-proprietor, uber driver, schoolteacher, or pet supply shopowner doing? How's their debt load trending? How's their savings trending?
[1] https://www.npr.org/2026/02/12/nx-s1-5711455/revised-labor-d...
[2] https://www.marketplace.org/story/2025/12/18/expect-more-of-...
Lots going on right now in the market, but IMO that retreat is the biggest one still.
Many companies were basically on a path of infinite hiring between ~2011 and ~2022 until the rapid COVID-era whiplash really drove home "maybe we've been overhiring" and caused the reaction and slowdown that many had been predicting annually since, oh, 2015.
There's a lot of perverse interests and incentives at play.
You can be an exec with 10-20% fewer random products/departments in your company, and maybe 40% fewer middle managers in the rest of them. You might even get a nice bonus for cutting all that cost! Bonuses for growth, bonuses for "efficiency" when the macro vibe shifts. Trim sails and carry on.
> We find no systematic increase in unemployment for highly exposed workers since late 2022
Also dont forget theres only so many viable revenue-generating and cost-saving projects to take. And said above - overhiring in COVID.
That's... not a good look for your engineers?
And in the longer term those people will also get deprecated.
Then any company that was staffed at levels needed prior to the arrival of current-level LLM coding assistants is bloated.
If the company was person-hour starved before, a significant amount of that demand is being satisfied by LLMs now.
It all depends on where the company is in the arc of its technology and business development, and where it was when powerful coding agents became viable.
Being overworked is sometimes better than being underworked. Sometimes the reserve is better. They both have challenges.
In that sort of high-fear, change-adverse environment "get rid of all the devs and let the AI do it" may not be the most compelling sales pitch to leadership. ("Use it to port the code faster so we can spend more time on the migration plan and manual testing" might have better luck.)
Best time to be a solo founder in underserved markets :)