The once-stable middle ground of tech employment is disappearing, leaving only two extremes: elite engineers working on frontier technology and product builders leveraging AI to operate independently.
Though some of this can be attributed to the overhiring of engineers during the pandemic, AI also has a role to play.
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While claims that software engineering jobs are dying have been repeated several times over the past few months, it has also been reiterated that engineers who use AI will be able to ride the wave. However, this new “AI-enabled engineer” phenomenon is creating a skill for mid-level software engineers, aka the middle-class of tech.
“The middle-class engineer is dying. And they’re dying because they’re not needed anymore,” said Greg Isenberg, CEO of Late Checkout. “We have product builders who happen to code. Armed with AI, they ship entire products in days.”
A Little Exaggerated?
A few years ago, typical tech salaries in the US looked like this: Entry-level engineers: $100k, mid-level engineers: $150k, and senior engineers: $200k. There used to be teams of 50 engineers working on projects that took months to ship.
Fast-forward to 2025, and the landscape has shifted dramatically. Product builders with AI are surplus, with frontier engineers being offered $500k and solo engineers outperforming teams with the help of AI tools. Projects are shipping in days, not months.
Even though the number of job openings on portals like Indeed for mid-level engineers has decreased, it does not directly correlate with the “vanishing” of the roles.
According to a recent survey by foundit, 47% of Indian professionals were unhappy with their current salaries. About 18% of mid-level engineers with 7-10 years of experience were dissatisfied.
It’s a bold claim, but one that reflects the fears of many in the industry. With AI tools like GitHub Copilot and Cursor, a single developer can now accomplish what once required an entire team. Companies are streamlining their operations, reducing headcount, and redefining what it means to be a software engineer.
While speaking with AIM, the head of operations of a firm setting up its GCC in Bengaluru said that they aimed to hire around 150 engineers. They focused on engineers who came with their own AI tools and could demonstrate that they could do the job of five engineers.
This would ensure that the output from the engineering team amounted to multiples of what was originally intended. Thus, these engineers could acquire much higher salaries than engineers without those skills.
This phenomenon has continued since last year. Allie K Miller, AI advisor and angel investor, had said nearly a year ago: “We’d rather hire one software engineer who knows how to use AI than five who don’t, even if it’s the same cost.” It seems that the effect of this is finally visible in the industry.
The Shrinking Middle
Historically, large mid-level teams formed the backbone of software engineering. Now, those roles are disappearing. Entry-level jobs are already saturated, and mid-level positions are following suit.
On the other side of the coin are junior developers, who are heavily reliant on AI tools for work and are unable to write code without them. As a result, senior developers have difficulty managing these junior developers.
Not everyone agrees that AI is the primary cause of the tech industry’s transformation. Many argue that the job decline is a natural correction after years of overhiring, particularly during the pandemic-era tech boom.
“Tech overhired in 2021-22, then slammed the brakes as reality hit,” wrote Paul Booth, a DevOps engineer. “AI tools like Copilot boost efficiency, but they don’t replace the need for engineers.”
Others point out that small teams have been building highly successful products for years. “Instagram had just 13 employees when it sold to Meta for $1 billion in 2012,” noted one Redditor. “Telegram is one of the most adopted messaging apps in the world, built by a small team. This isn’t new.”
What Lies Ahead
Perhaps the biggest losers in this shift are fresh graduates trying to enter the industry. Without entry-level positions, many are left scrambling for alternatives. Recent graduates now have to be better than people already in the job.
Despite the dire outlook, not everyone believes the traditional software engineering job market is doomed. “The AI hype bubble is arguably a fake gold rush,” noted a Redditor. “Companies are just cutting costs and using AI as an excuse.”
As pointed out earlier, many companies have been using AI as a scapegoat to cut costs. But in the end, the impact is on the engineers.
Regardless of the root cause, the shift is undeniable. The demand for routine coding jobs is shrinking, and opportunities are shifting toward those who can innovate and adapt. The “middle class” of tech may not be entirely gone yet, but it’s rapidly fading.
