Is the Software Job Market Oversaturated in 2025?
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The software job market today looks contradictory. While traditional fullstack developer roles vanish and applications pile up on one side, AI and machine learning are triggering a hiring boom on the other side.
Given AI’s relatively new dominance in the tech market it’s hard to compare AI job posts to the fullstack hiring surge from 2015-2021, and with AI job role titles changing faster than any other field, a clear picture of the tech market is hard to come by.
One reason the field can feel oversaturated is the intense competition for traditional software engineering roles, those without AI or ML skills, hence Codesmith’s expansion of the flagship program into the Software Engineering + AI/ML Immersive, and the launch of the AI & ML Technical Leadership Program.
Since 2015, over 177,000 software engineers have entered the tech industry via degrees, bootcamps, and self-taught paths, according to the U.S. Bureau of Labor Statistics. But while the talent pool has steadily grown, demand for traditional software engineering roles has contracted down by one-third since 2020.
Shrinking demand is compounded by over 300,000 tech layoffs since 2022, flooding the job market with experienced engineers. It’s worth noting that 42% of those layoffs were FAANG companies, who laid off 24% of their workforces since their 2019 expansion.
However, available roles being posted today attract overwhelming competition from developers at every level, fueling perceptions the field is oversaturated.
AI is taking over tasks that once gave junior engineers a foothold, while experienced developers affected by recent layoffs are now applying for roles below their previous level or pay grade. The result is a struggling junior to mid field, where newcomers are squeezed between seniors and automation.
In truth, total tech employment has increased by 20.7% since 2019, and the total number of tech job postings have risen by 56.8%, indicating that it’s not the market that is the issue, but the changing nature of the field.
For AI-skilled engineers the market tells a very different story. AI Engineer roles have increased 143% since May 2024.
There are an abundance of traditional devs, but a dearth of AI-skilled engineers, particularly as the skills requirements in this field are evolving 25% faster than any other sector.
For those with those skills, or those looking to employ them, the industry is far from oversaturated.
It’s not just AI Engineers that are in-demand. PwC reports a 38% increase across all AI-related roles since 2019.
AI roles are expanding over three times faster than average jobs, with Microsoft finding AI trainer, AI data specialist, and AI security specialist are the top roles companies will add in 2025.
The U.S. Bureau of Labor Statistics projects a 17% increase in software engineering roles, largely in the AI and ML fields, by 2033, with 140,100 new positions opening annually.
This appears at odds with the current state of the tech industry, but that’s because much of the surge in demand comes from non-tech industries like retail and healthcare, which are investing in AI and machine learning, not just to boost productivity but also to defend against a rise in cyberattacks.
But it does point to a new development in the hiring market for engineers, where today more tech workers are employed outside the tech sector than within it.
Codesmith alums have landed AI and ML roles since 2023, like TikTok’s Victor Luo, and with the 2025 launch of the AI & ML Technical Leadership program, engineers like John Maltese, who took on a leadership role directing his company’s AI strategy after graduating AITL, paid for by his employer, are deepening their capacities to lead with AI, not be replaced by it.
This is in line with the wider industry, where employers investing in upskilling their workers is a more prominent trend than layoffs, with 75% of employees surveyed reporting positive career growth, such as promotions and salary increases, according to a Gallup survey.
It’s not just AI and ML where employers face shortages and job opportunities are to be found, cybersecurity is also booming, with 94% of businesses using cloud services vulnerable to cybercrime and more jobs than qualified candidates.
Only 74 qualified candidates exist in the US for every 100 cybersecurity roles, while 514,359 were posted from May 2024 to April 2025, an increase of 12% (57,000 jobs).
With Cybersecurity an area Codesmith alums like Ousman Diallo are increasingly moving into, it is becoming a more reliable area for entry level jobs than traditional software engineering.
With cybercrime growing 12% annually, and AI acting as both a weapon and a shield, the need for cybersecurity specialists is urgent, and their shortage increasingly stark in today’s tech market.
This is not only a US issue but a worldwide phenomenon, with 3.5 million cybersecurity jobs remaining unfilled globally today.
Much of this shift is driven by new AI technologies: 40% of cybersecurity roles now require skills that didn’t exist three years ago, and 50% of specialized training will be removed from entry-level roles as employers prioritize candidates with expertise in emerging tech stacks like AI, according to Gartner.
No, the market isn’t oversaturated. But we are experiencing the emergence of two parallel tech hiring markets.
One, which most software engineers are familiar with, composed largely of junior, mid, and senior engineers in the more traditional fullstack developer sense, has experienced enormous turbulence since 2022 and is slowing down with the rise of AI and ML.
The other, which is in desperate need of more engineers, is one driven by an appetite for AI and ML-skilled engineers, who not only know how to use those tools, integrate them into a company or product, but who can also lead a company’s AI strategy.
This means understanding which tools to invest in, how best to upskill the current employees in those tools, and how to use those tools to enhance the company’s product or productivity. Those engineers are in high demand with an excess of job openings and some of the most competitive salaries in the industry today.
The market data is very clear that the future of software engineering, job opportunities, and competitive salaries lies in the AI and ML, and cybersecurity and cloud fields.
For the highest chance of success in the job search, engineers must demonstrate they can fill a company’s needs in these areas.
Having strong technical skills is important, but the capacity to lead a company’s strategy, communicate to leadership what directions they could go in with innovative tools, and identify opportunities to integrate them into the workforce and product, is a facet highly sought after by employers today.
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