For years, software developers stood near the labor market, earning high five- or six-figure salaries and basking in the glow of a red-hot tech sector. Recruiters flooded their inboxes, companies fought bidding wars over talent, and ambitious startups promised stock options that could turn employees into millionaires.

But something has shifted.

The hiring frenzy of 2021 and 2022 has turned into a slowdown. Demand for software developers is declining, and employment numbers have taken a surprising dip. According to a study by the ADP Research Institute, the U.S. now employs fewer software developers than it did in 2018.

What happened? And more importantly—what comes next?

A Pandemic Boom, Then a Crash

The pandemic reshaped the job market. As millions of people shifted to remote work, businesses scrambled to expand digital services. E-commerce, video conferencing, online education—these industries surged, and software developers reaped the benefits.

But by 2023, the hiring spree was over. Companies that had once expanded aggressively were now cutting back. Layoffs at major tech firms became routine. Meta, Google, Amazon, and Microsoft slashed thousands of positions, many of them in software engineering. Many programmers with skills required for high-paying jobs suddenly found themselves out of work.

ADP’s data shows that employment of software developers actually began slowing in 2020. The downturn accelerated in 2022, with steep drops in January, May, and again in 2023.

Despite occasional upticks, the trend is clear—fewer software developers are being hired, and pay growth has slowed compared to the rest of the U.S. workforce.

Is AI to Blame?

It would be easy to blame artificial intelligence for the decline. After all, tools like OpenAI’s ChatGPT can now generate working code in seconds. Companies are experimenting with AI-powered development tools, raising fears that software engineers could be automated out of their jobs.

But the hiring slowdown predates the AI boom. AI just accelerated it.

Instead, the shift seems to be tied to broader economic trends. Rising interest rates, tech stock volatility, and overhiring during the pandemic all contributed to job cuts.

Some companies, like Meta, have expressed a belief that almost all programmers will disappear. IBM CEO Arvind Krishna, however, sees a different future. He predicts AI will write 20-30% of code but insists that human programmers will remain essential. By contrast, Anthropic CEO Dario Amodei forecasted up to 90% of code will be AI-made.

Skills Still Matter

Even in a cooling job market, software development remains one of the highest-paying professions; if you can get a job, that is. The lowest-paid senior developers in the U.S. still make around $100,000 a year, with those in Silicon Valley pulling in a median salary of $163,000.

This doesn’t mean that all programmers are in trouble; those who have a high-level picture are likely to be just fine in the future as well.

Companies are looking for developers who can do more than just code. Engineers who understand AI, cloud computing, and cybersecurity are in high demand. Those with strong problem-solving and system design skills are still highly valued.

The difference? Programmers focus on writing code, while developers work on designing entire software solutions. AI may automate some of the grunt work, but the ability to solve complex problems and build large-scale systems remains irreplaceable.

A New Reality for Tech Workers

The days of effortless job-hopping in the tech industry may be over, at least for now.

Companies are hiring more cautiously. Growth is happening outside of Silicon Valley, with cities like Salt Lake City and Orlando seeing bigger salary increases than the Bay Area. And AI is reshaping workflows, forcing developers to adapt.

But software development isn’t going away.

From finance to healthcare, retail to entertainment, businesses still need well-designed, reliable software. The skills that built the digital age remain essential—just not in the same way they were before.

For software developers, the golden era may have ended. But there’s a place for them in the new economy as well.