Engineering still leads tech hiring as AI layoff fears fade

SignalFire’s June 22, 2026 State of Tech Talent Report says the feared “AI Code Apocalypse” has not materialized. At large tech companies, software engineers now account for 55% of all hiring, up from 46% in 2019, even as overall tech hiring has stalled at 75% of its pre-pandemic baseline. The pressure has fallen more heavily on design, product and marketing than on core engineering.

The hiring mix has also shifted toward more senior, flatter teams. Each engineering manager at a tech major now oversees about 12 engineers, up from 10, while new grad and entry-level hiring is down roughly 65% at the tech majors and about 76% at early-stage startups versus 2019. Even with that contraction, early-stage startups collectively brought on 7% more engineers in 2025 than they did in 2019, a sign that smaller organizations still need technical staff even when they trim everything around them.

SignalFire’s 2025 report had already pointed to that squeeze at the bottom of the pipeline. It said Big Tech new grads made up just 7% of hires, while startup new grads accounted for under 6%. That trend matters because it shows the labor market is not simply shrinking across the board. It is narrowing, with employers favoring experienced engineers who can work in leaner teams and take on broader technical responsibility.

The firm’s Nov. 13, 2024 engineering mobility report found that AI was not yet shrinking the engineering workforce, and said ML/AI engineer was the fastest-growing engineering role, up more than 2,770% over 10 years. That growth points to a narrower reality than the broad layoffs narrative suggests: AI is increasing demand for engineers who can build, train, integrate and govern the systems that employers want to deploy, not eliminating the need for engineering labor itself.

PwC’s June 15, 2026 Global AI Jobs Barometer reached a similar conclusion about the wider economy, finding that companies best able to use AI are expanding hiring faster than peers. It also said demand is rising for human skills such as judgment, creativity and leadership. In tech, the result is a split market: headline layoffs in the coordination layers built during the zero-interest-rate-policy era, and continued demand for engineers whose work AI can complement but not replace.