Why AI hasn’t replaced software engineers, and won’t

2025-04-15 · Source: AI as Normal Technology · Field: Technology & Digital — Software Development & Engineering, Artificial Intelligence & Machine Learning · Depth: Intermediate, long

Summary

The narrative that AI will cause mass layoffs in software engineering is largely "AI washing," according to an analysis of recent corporate job cuts and employment trends. Companies like Block, Snap, and Intuit attributed layoffs to AI, but subsequent reporting revealed financial pressures or corporate restructuring as the true drivers. A New York WARN Act disclosure checkbox for AI-related layoffs saw only 46 out of 25,000 affected workers in its first year. The article introduces the "decide-execute-deliver sandwich" model, explaining that AI primarily compresses the "execute" layer (coding), which studies show accounts for only 9% to 61% of a developer's time. The "decide" (specification, planning) and "deliver" (testing, accountability) layers, requiring deep human understanding, remain resistant to automation. While software engineer employment growth has slowed by about 3 percentage points post-ChatGPT, it is still increasing, with AI potentially boosting entrepreneurship. The distinction between unsupervised "vibe coding" and supervised "agentic engineering" is crucial, as the latter maintains human control and accountability, preventing widespread displacement.

Key takeaway

For Directors of AI/ML evaluating team structures, understand that AI's impact on software engineering is primarily productivity enhancement, not job replacement. Your teams should focus on strengthening "decide" and "deliver" capabilities, as these human-centric layers resist automation. Implement "agentic engineering" practices to ensure human oversight and accountability, mitigating risks associated with unsupervised AI. This approach will foster resilient teams and capitalize on AI-driven demand for more software.

Key insights

AI primarily automates the "execute" layer of software development, leaving human "decide" and "deliver" functions intact.

Principles

• Mass layoffs attributed to AI are often "AI washing" for financial reasons.
• Software development involves "decide-execute-deliver" layers.
• Human accountability and decision-making resist AI automation.

Method

The article analyzes corporate layoff announcements against financial realities and introduces the "decide-execute-deliver sandwich" model to explain AI's limited impact on core software engineering roles. It differentiates "vibe coding" from "agentic engineering" through empirical data.

In practice

• Scrutinize AI-driven layoff claims for underlying financial motives.
• Focus on "decide" and "deliver" skills for career resilience.
• Implement "agentic engineering" for supervised AI integration.

Topics

• AI Impact on Employment
• Software Engineering Workforce
• AI Washing
• Agentic Engineering
• Decide-Execute-Deliver Model
• Labor Economics

Best for: CTO, VP of Engineering/Data, Executive, Software Engineer, Director of AI/ML, Tech Journalist

Related on AIssential

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• Software Engineering Has Been Commoditized and Automated. What’s Next? — Software engineering is transitioning from a specialized craft to a commoditized infrastructure due to AI automation.
• Tech companies are cutting jobs and betting on AI. The payoff is far from guaranteed - The Guardian — Current tech layoffs are driven by AI investment and efficiency goals, but AI's job replacement capability remains uncertain.
• I dont get the "AI will replace devs" angle — AI is rapidly transforming software development, reducing demand for junior roles and shifting the economic landscape for individual contributors.

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Editorial summary, takeaway, and curation by AIssential. Original article published by AI as Normal Technology.