Engineering video
9:16 · 27 August 2025
Statistics showing massive spikes in job postings in 2022 are misleading because actual hires remained relatively constant, as companies often post jobs to keep pipelines full and show investors growth rather than actively hire.
Watch section from 0:00 →The overinvestment in AI is bursting, and industry leaders note that pretending AI can replace junior developers is flawed, with AI overall expected to create more jobs than it destroys.
Watch section from 1:16 →As the Federal Reserve lowers interest rates, companies can borrow and invest more capital, which historically restarts hiring cycles following periods of slow-downs and layoffs.
Watch section from 2:00 →A 2022 change to Section 174 forced companies to pay corporate tax on R&D and software development investments instead of writing them off, triggering major tech layoffs; its subsequent rollback in April makes domestic software investment tax-free again.
Watch section from 2:00 →Increased bureaucracy and costs associated with H-1B visas create stronger economic incentives for companies to hire within the US or offshore entire teams, though section 174 only grants tax breaks for domestic spending.
Watch section from 4:29 →The tech talent pool is shrinking as coding bootcamps close due to high fixed costs and low profitability, and fewer high school graduates enroll in computer science majors.
Watch section from 6:00 →So if you are a developer you have been on YouTube, you probably saw so many of those videos where people talk about how bad the market is. And they usually te around this graph where you see the number of posting for software development jobs in the US. And we see how it was at an all-time high in 2022 and just how bad it is. Now I do believe they are fundamentally wrong and I'm kind of lying to you because in reality if you look at actual hires, checking the same statistics, we see that the number of hires overall was never that high.
And so companies were posting a lot of jobs, but they weren't actually hiring that many people. Which means the highs weren't that high and the low is not that low. The graphs you see here are for general employment, but the software development curve follows a similar trend. And if we look at the last 20 years, we see the same trend where hires were pretty much constant compared to the number of postings, which is always a lot, a lot higher.
And the reason for that is because companies love to just pretend they're hiring, just to have their pipeline full, just to have people applying to them, just to show investors back they make a lot of money, but in reality they're not really looking for someone. Rather than any collapse of the whole market, what we are seeing is that there's been a generous stagnation. But as of 2025, we are seeing dev hiring is coming back very strong.
And here's why. Number one is because the AI bubble, it's bursting. And even Sam Altman himself said, yes, there is actually an AI bubble, there is actually a bit of over investment and it will burst. And he just said that a couple days ago. And we also had the AWS CEO, Matt Garman, coming out and saying that pretending to replace your junior devs with AI, it's dumped as he literally said. Now, we've been talking about AI in coding for a while in on channel, make sure you subscribe and make sure you watch all the other videos.
I will not dive in, but basically the overall effect of AI would probably be that it creates more jobs than it destroys. Now, by the way, I'm Bogdan, that's my brother Dsh and together, we founded the senior dev, for the last five years, we've been helping software engineers. focused on JavaScript, get to senior level and beyond. A lot of our students are based in the US, and so a lot of the conlusions that you'll see in the video are from the US market. And the number one reason why we expect hiring for developers to go up in the end of the year and the next year, is because the interest rates are going down again. So, Jerome Powell, the lead of the Federal Reserve announced that they are considering dropping the interest rates. And I will not go into too much depth into what this means economically, but basically, wherever you have lower rates, companies can borrow more money and then they can invest more money and that creates more employment. So every time the Fed would raise the rates, you'd have kind of a slow down in investments and then there would be layoffs. But then when they go low again, then you start hiring again. The only reason they don't keep them low forever is because it will create a lot of inflation. And then yes, you do have a job, but then everything becomes more and more expensive, so it's not sustainable. And so every once in a while, they need to put a handbrake on the economy. There's also been a change in the tax code and this is regarding section 174, because we're not accountants, probably we're not aware of, but it does affect how companies can deduct their expenses in R&D, which is mostly how they label their software development. So, ever since the 70s, whatever you spend as a company on development or product development would be tax-free. So basically that year you'd say, you know, I had 2 million revenue, but I spent a million in product engineering and product development and software engineering, and so that doesn't go into my profit. Because the US government basically was looking for ways to increase their revenue, they've been changing that and since 2022, you're actually getting charged. So you'd basically, even if you invest a lot in your software dev, you'd have to pay corporate tax on the investments you make. I will not go too deep into the accounting details, but exactly when they release this law, meta, a few days later announced their year of efficiency and laid off thousands of people, the same happened with Google, Microsoft, and Amazon did the same.
after that, Salesforce did exactly the same. And this was all triggered by this change in the law that went kind of undetected. Now, the section 174 was rolled back by the US administration last April, so after putting development efforts are again tax free. And not only that, but small companies and mid-sized companies can actually get the money they paid in tax for that back. So we do expect companies to start investing again in software just because it's attractive again to increase your product development priority.
Now, there's also an immigration type training up, and depending who you are, this might be bad news or good news. This is reach one be visas, which are the uh visas that most software developers that come from outside the US are use to work. And so, basically, around 120k HB1 visas were last year issues for new employment, these are not renovations, but actually new people, and around 70% of those are software developers, mostly entry level.
So, from these 70% that were software devs, another 70%, their previous status was student. So a lot of those are graduates, either Bachelor or masters that are looking for the first job. Now, the number of people applying for a visa also went up a lot, so 27, it might seem like a very big number, but it's not we had a record number of applications in the US. But what happens is that it's just more expensive for companies to do all the bureaucracy involved getting someone one of those visas and to renovate.
And so what will happen is that there's a morph an economic incentive to hire people from the US. Now, this might result in a complete offshoring, so if you really want to hire people from outside the US and save up costs, you can just offshore the whole team. But remember that section 174, that's been rolled back, that only happened for domestic expenditure. So, if you are actually investing in software outside the US and you have that in your balance sheet, you have to pay tax on that.
And so, if we add all those things together, you see that there's a political and legislative change that makes it harder for businesses to hire or less attractive to hire developers from the outside. way to go to the H1B visa process, all that will end up benefiting one way or the other the US- based developers. And just going down into this one B number, we see that last year from the 400,000 total renovation and new issue, 250,000 are basically software engineers. So, this is a very big number taking to count that as of now, if we go to software development on LinkedIn, you probably have 60,000 to 100,000 openings for the whole US. So, they're a very big chunk of software engineers that are dependent on those visas. And so, obviously, depending who you are, this might affect you differently. Again, this is not a politics channel, we just try to give you the best information, but keep this in mind and how it will affect you depending who you are. There's also fewer developers in the market, and the number one reason for that is because there's a trend of quitting your job. It kind of became trendy, the day in the life videos and getting laid off, the next thing to be cool in tech is to quit your job. Because making an average of 200 to 250,000 k is just not meaningful anymore. We don't recommended to quit, we recommended to get better. And if you want to get find the best way for you to get to the next level and get better, I invite you to take our technical assessment, which will give you a score on where exactly are you right now and based on that you can also understand where you stand in the market. There's also the trend of boot camps closing down, a lot of the coding boot camps have been closing down, it's 2024 and 2025. Mostly because they were not profitable. So, not enough people applied and then they had high fixed costs. And a lot of those boot camps tried to sell themselves as startups, but they had a lot of fixed costs, a lot of operations. A lot of them were not remote, you actually had to go somewhere, the tuition fees were really high. A lot of them have been closed down. And also I knew a lot of new high school graduates are not finding computer science degrees as attractive as they were. We see that computer science majors at Princeton is said to be 25% smaller in two years than it is today. So, there's a lot of less people going for that career specifically.
or law or healthcare, because there's no good news from the tech side. Wrapping it up, we do expect a recovery of software engineering hiring in the US, pre layoff levels in the next six to 12 months. Again, those changes economical changes, we see they take a bit to propagate, so it's not going to be instantaneous. We we did have a very good August in terms of people getting very good offers in software mastery, but we do believe it will take a bit longer.
So probably September, October and November is where you'll see a lot more good news in the market. Remote software jobs for the US will get even more competitive, I know there's a lot of people that are looking for those, but there's less financial incentives for companies to hire outside because of that section 174, which only makes domestic spend as non-taxable. This optimist, this growth will propagate to some level to the open market, but not at the same level, the dynamics in the open market, in the UK market and then, you know, the other part of Europe are a bit different in the US, and certain things take longer, both for the good and for the bad.
If you want us to make a video specifically about that market, let me know in the comments. And by the way, if you are a JavaScript engineer, we'll help you becoming replaceable, develop senior level thinking and try despite the AI and layoffs, check off retaining in the comments and I'll see you in the next one.
