People who are currently junior engineers (i.e. graduating class of 2024+) chose their majors in a ZIRP economy (2021 and earlier) that could not hire enough engineers fast enough, but graduated into an economy that was post-ZIRP and is still actively trimming software engineers from the work force (2024 and beyond).
LLMs only became a factor in hiring in the summer of 2025. But by then there was already a massive oversupply (relative to demand) of fresh CS graduates.
My personal opinion is that the market is not (yet) rough because of AI, it's actually mostly just rough because we're not in ZIRP anymore. AI is maybe making it worse on the margin, and is a convenient excuse, insofar as AI is both easier to scapegoat and reason about.
[1]: Software dev job postings on indeed in the US. Peaked in 2021, before falling off a cliff. https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE
[2]: % of CS grads relative to all college enrollments; which peaked in class of 2026 (enrollment as of '22). https://www.reveliolabs.com/news/social/computer-science-has...