Key facts
- AI was cited as the most common reason for tech layoffs in May.
- SignalFire's analysis indicates engineering roles are the most resilient to AI automation.
- Engineering hiring declined only 11% compared to a 25% drop in overall tech hiring since 2019.
- Engineers now constitute 55% of new hires at major tech companies, an increase from 46% in 2019.
- Early-stage startups increased engineering hires by 7% in 2025 compared to 2019.
New data suggests that artificial intelligence is not leading to a significant reduction in engineering jobs, contrary to widespread concerns. While tech layoffs reached a multi-year high in May, with AI frequently cited as the cause, analysis of hiring trends indicates that engineering roles are proving remarkably resilient.
Researchers at venture firm SignalFire tracked millions of employees and found that engineering was the most robust job function in 2025. Despite an overall 25% decrease in hiring at large tech companies compared to 2019, engineering roles experienced a much smaller decline of just 11%. Engineers now represent 55% of new hires at major tech firms, up from 46% in 2019. This trend extends to early-stage startups, which collectively hired 7% more engineers in 2025 than in 2019.
SignalFire's head of research, Asher Bantock, noted that if AI were truly substituting for engineering talent, hiring in this sector would be expected to fall sharply. Instead, engineering headcount is growing faster than most other tech job functions. This aligns with observations from Anthropic's head of economics, Peter McCrory, who stated in March that he had not yet seen significant AI-driven effects on overall unemployment rates. Nvidia CEO Jensen Huang has also dismissed the idea that AI will replace software engineers, arguing that AI tools are making engineers more productive and busier than ever by enabling them to focus on generating new ideas.
The current situation appears to exemplify the Jevons paradox, where increased efficiency leads to greater demand for a resource. As engineers become more productive with AI tools, the demand for their skills and the scope of their work expands.