Yes, no, maybe. For people who are just doing glue code with no real understanding, yes. That market is going south.
For the high end it’s more complicated:
Comp (not salaries) took a huge upward swing because of an influx of VC money as well as a bull market. People at FAANG type companies could leverage their unvested stock to get higher comp at new companies. Let me explain.
Bob joins Amazon in 2016. His initial comp was targeting 250k but by year 3 he was going to make 350k due to stock appreciation on his 4 year stock grant.
Bob has a smashing interview at Google and they know he won't take less than 350k. So they offer 370k PER YEAR (with an initial stock grant) even though Bob wasn't going to always make that much at Amazon.
Bob works at Google for a bit, his stock goes up even MORE, bob is bored and interviews at Uber/Databricks/Snowflake who has billions in VC money and they offer him 450k (sure some is less liquid, but maybe he knows there's a secondary market).
Without a bull market and without the VC market, comp is going to be a LOT less for the top of band offers.
However, it's probably not going to be a lot lower than the bottom of band offers, because Jim who cracked google but didn't have a boatload of unvested stock and competing offers wasn't getting near as much as Bob anyway.
Finally, Software Engineer fuck ups are still very expensive for companies. So any profitable company that can afford it is going to to to pay close to top of market because paying 2x as much for an engineer who is even 20% better is WORTH IT for them.
For every Bob in your example, there hundred of thousands who work in a totally different level: for instance myself. For the rest of us, the market looks good, still improving (regardless of the layoffs) and salaries and perks are better than a decade ago.
To a degree it feels like they are already. The increasing number of engineers looking for work means that companies don't have to offer as much to get good candidates, and it seems like salaries in many advertised jobs are going down because of it.
I definitely see AI causing a hit too, since unfortunately, a lot of people's needs when it comes to tech are fairly limited. Yeah, it can't compete with a good programmer in terms of quality or efficient system design, but many people and companies don't need that. They just need something that does what they need it to, quality be damned. So a lot of companies feel like they'll either offer less (since some guy playing around with prompts is good enough to do what they want) or not hire programmers at all.
AI (as of present) is only going to affect code monkeys. As a senior staff, most of my job is writing technical documents, and directing other engineers, and prototyping / fixing deep bugs. ChatGPT helps with prototyping a bit, but is largely useless for fixing bugs in large distributed systems.
They very much are, right now. Lots and lots of big layoffs, the FAANG/MAGMA companies have completely dropped the halo effect they had over the industry. Everyone had to chase them on comp to get the best people; now they're ejecting people left, right and centre and there's no incentive for the smaller players to try and keep up with the competition anymore, because the competition in gone.
I've definitely noticed this myself when I was working my last job (quant finance in London, startup fund). We were getting premium talent applying for roles that we never dreamt of getting before then. A lot of them were ex Meta, ex google, ex Palantir etc. Guys who were very good but went to work mindless jobs for big tech for that 300k pay package. Now they're asking for half that, and desperate for a job.
I was under impression that only a few prop trading and HFT firms in London pay around the 300k mark, with FANG-type companies offering roughly half. Start-ups slightly below that but with generous stock options, if that’s your bag. Maybe I’m miscalibrated?
Yes, miscalibrated -- a TC of $150k would be low for a FAANG company, unless you're just talking about entry level pay. Once you're a year or two in, $200k+ is typical.
In addition to the great points in the other comments, I'd also point out that remote work is a double edged sword. I remember in the early 00s when the .com bubble burst, and there was huge talk of software work being outsourced to India and China. It never really happened, for lots of different reasons.
This time around, though, companies are much more comfortable with remote work, and Zoom/Meet/etc. has gotten much, much better than options from 15+ years ago. I've already seen an explosion of outsourcing to Latin America and Eastern Europe - the developers I've worked with from those locales have been great, usually great English skills, and much better time zone overlap. This trend has absolutely been pushing down dev salaries in the US, especially for more junior devs.
There’s a difference between remote work within a country (the one everyone is in favour of) versus remote work worldwide (or at least to some range of time zones). The former doesn’t require anything extra regarding legal stuff, while the latter does (and it’s way less common than the former).
All the companies I have worked for in a remote fashion were offering remote within the country and also on the countries they have a legal presence (which were 2 or 3 at most)
While I do think that better video conferencing + higher bandwidth has certainly helped the outsourcing movement, I still find that its fairly limited for many companies.
At least 50% of the positions that I come across on hiring boards that allow for fully remote still have a qualifying regional clarification (U.S. only). It's probably a combination of complexities around accounting/taxes and time zones.
However if a company can support outsourcing they can facilitate much easier communication between the onshore and offshore dev teams by restricting offshore hires by LONGITUDE not LATITUDE - e.g. United States companies hiring from Central and South America for example.
I think it depends on the region and just looking at salaries is too narrow. In the US, the salaries are high. I don't think the salaries will decrease. However, the number of jobs will. More companies will outsource to other countries. Developer salaries in those countries will increase.
Yes, depending on the state of the economy and more importantly the VC scene. I do not think LLMs will have any major impact to "Software Engineers". Software Engineers will have better tooling than stack overflow. So they will become more efficient. So we will build better softwares.
In the US, in general? I believe so, yes. For a couple of years at least. In many European countries the salaries are already much lower (than US), so perhaps not as much wiggle room there.
That has been always the case, though. But in the context of Europe, salaries for software engineers have definitely improved. 10 years ago 6 figure salaries where unheard of, while nowadays it’s possible
With remote work and Globalization, it may not regress but will definitely continue to become more competitive. An "Average" engineer even in a LCOL area in US will cost a lot more than an "average" engineer in say South America and of course in Asia. Companies that have figured this out are already using the global market to their advantage.
I've been coding for 12+ years at some top tech companies. I think salaries will drop like a rock for anyone that is not absolutely top knotch. Claude 3.5 Sonnet can code a near perfect UI widget from a screen shot. The game is over on this whole thing, software development as we know it is over.
> Claude 3.5 Sonnet can code a near perfect UI widget from a screen shot.
Not sure about Claude and "coding ui widgets", but a while ago I tried getting ChatGPT to make a simple demo program in C using some relatively new Linux-specific APIs. It spat out a piece of code that would not even compile, let alone work.
It was remarkably wrong. In the specifically interesting part, that is where it was supposed to use the relatively new Linux-specific APIs, it failed completely and used some POSIX-standard APIs (and used them wrong).
Dunno but it seems to me that some jobs are more at risk than others.
----
Also: I routinely have to work with software that is supposed to do A, B and C according to its documentation but does B, Ç, Σ in practice. If an LLM was to "read" the documentation and act on production according to that, production would burn in a couple of hours. I think I'll be fine for a while.
My previous employer didn't give people raises and then later laid off me and most of my department. My new employer didn't give people raises and then laid people off, but not me.
My salary didn't decrease, but with inflation my buying power is lower.
Certainly they won't keep up with inflation. So it's possible they won't exactly regress, but they will fall back as things get more expensive, and salaries don't go up.
That's the whole purpose of mass layoffs, right? Some of it seemed unnecessary; it seemed to be something everyone did in solidarity because salaries were going up unchecked.
How is that different than the transition from C++ to say, Java or Python? Didn't the higher level languages make it easier for people without as much technical know how to write software faster and with more copy/paste?
Obviously. At some point supply will catch up with demand.
Software development is vastly overpaid compared to how complex it is, imagine a 6 month Bootcamp for becoming a civil engineer. High wages are purely the result of the enormous and continually increasing demand for the profession.
> Software development is vastly overpaid compared to how complex it is, imagine a 6 month Bootcamp for becoming a civil engineer.
If anything, I think the past couple years have belied the idea that you can become a competent software developer in 6 months. It is this "lowest level" dev work anyway that I see under the most pressure from outsourcing.
A lot of development activities absolutely can be done by someone with 6 months of bootcamp.
Of course there are also things which you absolutely need significantly more knowledge for. But pretending that these two are the same thing, have the same title and roles is the actual issue.
"absolutely can be done by someone with 6 months of bootcamp"
You forgot to add "with a lot of hand holding and guidance and that too if that 6 month bootcamper is competent enough and cares about learning on their own".
That is just true every time you have someone enter a totally new field of work.
Just compare it to engineering disciplines. Imagine a civil engineering bootcamp, 6 month of that, some motivation and coaching from your coworker is enough to evaluate the structural soundness of public infrastructure?
I think you completely underestimate how high the barrier to entry is for engineering disciplines compared to software development. The high pay for software engineers in the US is a phenomenon that is driven by absurdly high demand. For no other discipline is the barrier to entry so low and the reward so high, even outside of the US this isn't the case. In Europe software development is paid very differently.
I think Software development is vastly overpaid for junior profiles but largely underpaid for senior profiles.
If you think how central some key people are to some companies and how much those companies make (gross product)... You'll see that some key developers are probably worth even more than CEOs.
This has been largely not understood, in my opinion.
Yes, no, maybe. For people who are just doing glue code with no real understanding, yes. That market is going south.
For the high end it’s more complicated:
Comp (not salaries) took a huge upward swing because of an influx of VC money as well as a bull market. People at FAANG type companies could leverage their unvested stock to get higher comp at new companies. Let me explain.
Bob joins Amazon in 2016. His initial comp was targeting 250k but by year 3 he was going to make 350k due to stock appreciation on his 4 year stock grant.
Bob has a smashing interview at Google and they know he won't take less than 350k. So they offer 370k PER YEAR (with an initial stock grant) even though Bob wasn't going to always make that much at Amazon.
Bob works at Google for a bit, his stock goes up even MORE, bob is bored and interviews at Uber/Databricks/Snowflake who has billions in VC money and they offer him 450k (sure some is less liquid, but maybe he knows there's a secondary market).
Without a bull market and without the VC market, comp is going to be a LOT less for the top of band offers.
However, it's probably not going to be a lot lower than the bottom of band offers, because Jim who cracked google but didn't have a boatload of unvested stock and competing offers wasn't getting near as much as Bob anyway.
Finally, Software Engineer fuck ups are still very expensive for companies. So any profitable company that can afford it is going to to to pay close to top of market because paying 2x as much for an engineer who is even 20% better is WORTH IT for them.
It's just likely top of market is down a bit.
For every Bob in your example, there hundred of thousands who work in a totally different level: for instance myself. For the rest of us, the market looks good, still improving (regardless of the layoffs) and salaries and perks are better than a decade ago.
To a degree it feels like they are already. The increasing number of engineers looking for work means that companies don't have to offer as much to get good candidates, and it seems like salaries in many advertised jobs are going down because of it.
I definitely see AI causing a hit too, since unfortunately, a lot of people's needs when it comes to tech are fairly limited. Yeah, it can't compete with a good programmer in terms of quality or efficient system design, but many people and companies don't need that. They just need something that does what they need it to, quality be damned. So a lot of companies feel like they'll either offer less (since some guy playing around with prompts is good enough to do what they want) or not hire programmers at all.
AI (as of present) is only going to affect code monkeys. As a senior staff, most of my job is writing technical documents, and directing other engineers, and prototyping / fixing deep bugs. ChatGPT helps with prototyping a bit, but is largely useless for fixing bugs in large distributed systems.
They very much are, right now. Lots and lots of big layoffs, the FAANG/MAGMA companies have completely dropped the halo effect they had over the industry. Everyone had to chase them on comp to get the best people; now they're ejecting people left, right and centre and there's no incentive for the smaller players to try and keep up with the competition anymore, because the competition in gone.
I've definitely noticed this myself when I was working my last job (quant finance in London, startup fund). We were getting premium talent applying for roles that we never dreamt of getting before then. A lot of them were ex Meta, ex google, ex Palantir etc. Guys who were very good but went to work mindless jobs for big tech for that 300k pay package. Now they're asking for half that, and desperate for a job.
I was under impression that only a few prop trading and HFT firms in London pay around the 300k mark, with FANG-type companies offering roughly half. Start-ups slightly below that but with generous stock options, if that’s your bag. Maybe I’m miscalibrated?
Yes, miscalibrated -- a TC of $150k would be low for a FAANG company, unless you're just talking about entry level pay. Once you're a year or two in, $200k+ is typical.
In addition to the great points in the other comments, I'd also point out that remote work is a double edged sword. I remember in the early 00s when the .com bubble burst, and there was huge talk of software work being outsourced to India and China. It never really happened, for lots of different reasons.
This time around, though, companies are much more comfortable with remote work, and Zoom/Meet/etc. has gotten much, much better than options from 15+ years ago. I've already seen an explosion of outsourcing to Latin America and Eastern Europe - the developers I've worked with from those locales have been great, usually great English skills, and much better time zone overlap. This trend has absolutely been pushing down dev salaries in the US, especially for more junior devs.
There’s a difference between remote work within a country (the one everyone is in favour of) versus remote work worldwide (or at least to some range of time zones). The former doesn’t require anything extra regarding legal stuff, while the latter does (and it’s way less common than the former).
All the companies I have worked for in a remote fashion were offering remote within the country and also on the countries they have a legal presence (which were 2 or 3 at most)
While I do think that better video conferencing + higher bandwidth has certainly helped the outsourcing movement, I still find that its fairly limited for many companies.
At least 50% of the positions that I come across on hiring boards that allow for fully remote still have a qualifying regional clarification (U.S. only). It's probably a combination of complexities around accounting/taxes and time zones.
However if a company can support outsourcing they can facilitate much easier communication between the onshore and offshore dev teams by restricting offshore hires by LONGITUDE not LATITUDE - e.g. United States companies hiring from Central and South America for example.
I think it depends on the region and just looking at salaries is too narrow. In the US, the salaries are high. I don't think the salaries will decrease. However, the number of jobs will. More companies will outsource to other countries. Developer salaries in those countries will increase.
Yes, depending on the state of the economy and more importantly the VC scene. I do not think LLMs will have any major impact to "Software Engineers". Software Engineers will have better tooling than stack overflow. So they will become more efficient. So we will build better softwares.
In the US, in general? I believe so, yes. For a couple of years at least. In many European countries the salaries are already much lower (than US), so perhaps not as much wiggle room there.
I certainly don't see any decrease in the EU on my side indeed, if anything it's still increasing at a relatively low rate.
Thing is, in most EU countries, tech salaries are way lower than US.
That has been always the case, though. But in the context of Europe, salaries for software engineers have definitely improved. 10 years ago 6 figure salaries where unheard of, while nowadays it’s possible
With remote work and Globalization, it may not regress but will definitely continue to become more competitive. An "Average" engineer even in a LCOL area in US will cost a lot more than an "average" engineer in say South America and of course in Asia. Companies that have figured this out are already using the global market to their advantage.
I've been coding for 12+ years at some top tech companies. I think salaries will drop like a rock for anyone that is not absolutely top knotch. Claude 3.5 Sonnet can code a near perfect UI widget from a screen shot. The game is over on this whole thing, software development as we know it is over.
> Claude 3.5 Sonnet can code a near perfect UI widget from a screen shot.
Not sure about Claude and "coding ui widgets", but a while ago I tried getting ChatGPT to make a simple demo program in C using some relatively new Linux-specific APIs. It spat out a piece of code that would not even compile, let alone work.
It was remarkably wrong. In the specifically interesting part, that is where it was supposed to use the relatively new Linux-specific APIs, it failed completely and used some POSIX-standard APIs (and used them wrong).
Dunno but it seems to me that some jobs are more at risk than others.
----
Also: I routinely have to work with software that is supposed to do A, B and C according to its documentation but does B, Ç, Σ in practice. If an LLM was to "read" the documentation and act on production according to that, production would burn in a couple of hours. I think I'll be fine for a while.
In my case it froze instead of regressing.
My previous employer didn't give people raises and then later laid off me and most of my department. My new employer didn't give people raises and then laid people off, but not me.
My salary didn't decrease, but with inflation my buying power is lower.
Certainly they won't keep up with inflation. So it's possible they won't exactly regress, but they will fall back as things get more expensive, and salaries don't go up.
That's the whole purpose of mass layoffs, right? Some of it seemed unnecessary; it seemed to be something everyone did in solidarity because salaries were going up unchecked.
IMO they will.
What are LLMs actually good at?
Copycat code and copycat ideas.
IMO we are going to see a massive wave of interoperability, and "good enough" software to compete and drop the value of software dramatically.
This will drop profitability drastically, and put downward pressure on salaries.
How is that different than the transition from C++ to say, Java or Python? Didn't the higher level languages make it easier for people without as much technical know how to write software faster and with more copy/paste?
Not in any predictable time frame.
I constantly amazed at the stupid stuff software engineers get paid big bucks to do.
There are plenty of possibilities and what-ifs. Nobody has a crystal ball.
But as of now, there’s no reason to think our pay will permanently crash.
[dead]
Obviously. At some point supply will catch up with demand.
Software development is vastly overpaid compared to how complex it is, imagine a 6 month Bootcamp for becoming a civil engineer. High wages are purely the result of the enormous and continually increasing demand for the profession.
> Software development is vastly overpaid compared to how complex it is, imagine a 6 month Bootcamp for becoming a civil engineer.
If anything, I think the past couple years have belied the idea that you can become a competent software developer in 6 months. It is this "lowest level" dev work anyway that I see under the most pressure from outsourcing.
A lot of development activities absolutely can be done by someone with 6 months of bootcamp.
Of course there are also things which you absolutely need significantly more knowledge for. But pretending that these two are the same thing, have the same title and roles is the actual issue.
"absolutely can be done by someone with 6 months of bootcamp"
You forgot to add "with a lot of hand holding and guidance and that too if that 6 month bootcamper is competent enough and cares about learning on their own".
That is just true every time you have someone enter a totally new field of work.
Just compare it to engineering disciplines. Imagine a civil engineering bootcamp, 6 month of that, some motivation and coaching from your coworker is enough to evaluate the structural soundness of public infrastructure?
I think you completely underestimate how high the barrier to entry is for engineering disciplines compared to software development. The high pay for software engineers in the US is a phenomenon that is driven by absurdly high demand. For no other discipline is the barrier to entry so low and the reward so high, even outside of the US this isn't the case. In Europe software development is paid very differently.
I think this is only partially true.
I think Software development is vastly overpaid for junior profiles but largely underpaid for senior profiles.
If you think how central some key people are to some companies and how much those companies make (gross product)... You'll see that some key developers are probably worth even more than CEOs.
This has been largely not understood, in my opinion.
Senior developers are harder to replace, but by no means are they underpaid.
Even if their contribution was significant, in most cases a replacement with the same competency could have been found.