Software development is one of the most sought-after career options by most students and professionals. Above all, its continuous evolution has played a huge role in its growth and popularity
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Software development is one of the most sought-after career options by most students and professionals. Above all, its continuous evolution has played a huge role in its growth and popularity.
Most students were told to learn to code, and the government continuously promoted digital skills, based on the assumption that the demand for programmers would always be there and continue to grow due to innovation. The evolution of artificial intelligence has led to a major shift in the industry.
In 2026, large companies like Block have already laid off over 4000 employees. This was a result of the company seeing the benefit of AI productivity. The shift was geared towards automation, similar outputs and fewer developers. Unlike the assumption that AI will help, it is actually playing a role in replacing large portions of software labour. However, it is creating new roles that surround the use of AI.
Over time, other software development companies have been restructuring, including IBM, which has replaced human roles in human resources & back-office functions with AI and automation. Hiring focus is now directed towards AI-related programming and sales roles. Verizon also cut off over 13,000 employees, aiming to simplify operations to address the complexity and friction that frustrate customers, and it was seen as an opportunity to reset, restructure and realign the company’s priorities.
HP also disclosed plans to eliminate 4,000-6,000 jobs by 2028, Apple trimmed sales positions, while Amazon cut 14,000 corporate workers in October, including 1,800 engineers. Amazon explained the layoffs were meant to reduce bureaucracy and leverage generative AI agents. Also, Deep Watch cited that artificial intelligence was a contributing factor in the decision to reduce staff plus increase AI investment. It laid off around 60-80 employees out of its 250.
In the past, building software required specialists such as developers, testers, QA engineers, documentation writers, DevOps staff and support engineers, each performing their functions based on their expertise. They worked as a team to ensure the software's success. AI changed the equation, with modern generative coding systems such as GitHub Co-Pilot, Q Developers, IBM Watson Code Assistant, CodeWP, AskCodi, Codacy, Metabob, etc. This has led to recent layoffs because if one developer can do work for several, there is no need for a large headcount in engineering, testing and support roles; instead, invest in AI infrastructure. Based on recent observations, companies are restructuring around AI.
Also, the effects are being witnessed in the financial markets. For example, IT outsourcing companies in India, which have traditionally been a stable growth investment, have fallen significantly because of fears that AI will automate outsourced software services. The technology industry in India employs millions of citizens, which is risky given its labour-intensive nature, and AI poses a threat to export earnings.
Previously, software engineering was a guaranteed path to high income because of strong demand, specialised skills and limited supply; however, AI seems to be eroding all three simultaneously. One engineer with modern AI tools can easily build features, debug code and deploy systems. Therefore, a reduction in the number of needed developers. Junior developers tend to perform repetitive tasks such as writing code, building simple APIs, implementing interfaces, and creating tests; however, AI can now provide structured, pattern-based work, shifting the work. If juniors aren’t there, it means no progression to senior levels; therefore, the career ladder will be destroyed.
AI also weakens global labour arbitrage, since companies previously outsourced software development services to lower-cost countries to reduce expenses. AI use has reduced the size of that workforce by half and, without doubt, can easily replace a large offshore workforce. Also, since universities still graduate large numbers of developers each year, the profession now has an oversupply of capable people.
The use of AI is helpful to small teams in reducing salary expenses, accelerating product development and increasing profits, and the restructuring of larger companies is giving them a competitive edge in the industry. Software will always be helpful across all sectors of the industry, as the need for software will always be there; however, AI will play a huge role in this industry.
The golden age of coding as a mass high-income profession will be coming to an end very soon, and there will be a need for a few people to develop software in the industry. AI is surely changing this industry, and people need to upskill to remain relevant; otherwise, without the relevant information on working with intelligent machines, productivity levels will be reduced.
The use of AI is helping small teams to reduce salary costs, accelerate product cycles, and improve margins, while the bigger companies' restructuring is giving them a competitive advantage. Software will remain beneficial to all sectors of the economy as the need for digital systems increases; however, AI will play a major role in the sector.
Unfortunately, the golden age of coding as a high-income profession may end soon, as fewer developers are needed. AI is surely transforming the industry, and people need to improve their skills to remain relevant in the field; otherwise, without relevant information on working with intelligent machines, productivity levels will be reduced.
For decades, universities and training programmes have been developing software and software courses, all under the assumption of steady labour demand. However, as AI continues to squeeze developer positions and raise skill requirements, the education system may be out of step with what it produces and what the labour market needs. Therefore, it is essential to highlight that the entire digital skills education pipeline must evolve in line with the technology it once sought to address.
The kinds of developers who would prosper are those familiar with AI's capabilities and limits, complex system architecture, software integration, AI-driven workflow management and product-level innovation. Of course, the fact remains that while software development is not going away, it is evolving from a labour-intensive process into an extremely automated process.
As AI continues to squeeze developer positions and raise skill requirements, the education system may be out of step with what it produces and what the labour market needs. Therefore, the entire digital skills education pipeline must evolve in line with the technology
The writer is the author of Digital Pakistan, founder and host of the Digital Pakistan Podcast, and holds the position of chief digital officer and director at the Centre for Information and Communication Technology at IoBM. He tweets and posts at @imranbatada and can be reached at: [email protected]
