[HN Gopher] IT Unemployment Rises to 5.7% as AI Hits Tech Jobs
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IT Unemployment Rises to 5.7% as AI Hits Tech Jobs
Author : paulpauper
Score : 112 points
Date : 2025-02-11 17:18 UTC (5 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| wyattshacker wrote:
| Current US UR is just above 4%. 1.7% Delta. Stay tuned to see if
| the gap widens in this particular sector at a faster rate than
| others.
| tryptophan wrote:
| H1B has surely nothing to do with this.
| addicted wrote:
| I didn't realize the H1B program started within the past 2
| years.
| Spooky23 wrote:
| H1B slows down offshoring.
| ivewonyoung wrote:
| Kinda dupe https://news.ycombinator.com/item?id=42995524
| zusammen wrote:
| The irony is that AI, as a replacement for an even average
| programmer, _doesn't work_. You can use it helpfully if you are
| already a programmer, but if you're not, you won't know when it's
| generating insecure or even non-working code.
|
| And yet it's causing massive disruption. The bosses have such a
| hardon for layoffs that they're doing this on the slim chance
| that it might work for them. Having to hire programmers back in a
| panic is, as they see it, future someone else's problem.
| hobs wrote:
| The only change this quarter is the use of AI to justify this
| behavior :)
| kcplate wrote:
| > The irony is that AI, as a replacement for an even average
| programmer, doesn't work.
|
| Yet.
| brink wrote:
| AI needs to fundamentally change before this happens. We're
| not even close to capturing actual reasoning in AI models.
| elif wrote:
| Disagree. I've been coding with o1 and o3-mini-high
|
| If you give it a prompt which resembles a requirements
| document produced by a competent manager, you will get what
| you request and it will run first time.
| bigtex wrote:
| And how many C suite executives will be doing this?
| bluefirebrand wrote:
| I think you overestimate how many people could produce this
| document to the degree you're talking about
| elif wrote:
| Doesn't matter how many people can produce the
| requirements document when an AI can produce it.
|
| No manager and coder pair can iterate on an idea 5 times
| per minute, even if the first attempt needs correction,
| the timescale disparity makes AI agents appealing for
| nearly all noncritical coding tasks.
| bluefirebrand wrote:
| Now you're talking about someone who can describe what
| they want in enough so that an AI can generate a strictly
| defined requirements document with enough detail that
| another AI (or the same AI) can generate working code?
|
| It's just AI all the way down, and each step still needs
| to be validated because AI is not reliable
| lazide wrote:
| lol. The hardest part in corp programming is getting the
| requirements right when literally no one involved can
| seem to think themselves out of a paper bag.
|
| It isn't a matter of iterating either, it's being able to
| figure out what is politically workable and actually
| implementable.
| spacemanspiff01 wrote:
| What language?
| elif wrote:
| I used to pick new languages when I started projects with
| AI for learning but lately I've been using ruby for
| everything possible and I generally prefer it's output as
| it writes stuff more idiomatically than I do (out of
| laziness)
| ebalit wrote:
| Do you have a chat example you can share where you found it
| to work great? I feel that the performance varies a lot
| between domains.
| elif wrote:
| Maybe. But if one founder and a couple of good devs can
| handle the requirements and management, and handhold the
| agents when needed to make a product 80% as good as a
| competitor with 200 employees, it's still gg for that
| competitor.
| rchaud wrote:
| It's irrelevant anyway, because AI companies are not HR
| firms. They don't get rich by lowering the cost of labor,
| nobody in tech does. They get rich by implementing the
| IBM/Oracle/Salesforce model for enterprise B2B: selling a
| "platform" with plenty of "smart plugins", which will require
| plenty of humans to sit in on meetings, write technical
| requirements, do QA and the usual stuff that pushes IT costs
| way past budget.
| kmonsen wrote:
| Being helpful to 2/3 might be enough to lay off 1/3
| bigtex wrote:
| 100% C suite executives are not going to sit in front of a chat
| agent to fix a bug in an application or solve a problem.
| throwaway290 wrote:
| Managers would do what they always do. Give somebody
| requirements. Just in this case it's "something"
| simonw wrote:
| That's absolutely true, but it doesn't mean AI won't lead to
| job losses just in terms of increased productivity: if your
| existing programmers can get more done you may find yourself
| reducing (or at least freezing) your team size.
|
| I continue to hope that the net result of programmers getting
| more productive is an _increase_ in demand for our skills, as
| employers realize they can get a whole lot more value for their
| investment. It might take a while for that to shake out though
| - we need companies to realize they can take on more ambitious
| projects now.
| tokioyoyo wrote:
| I'm oversimplifying it horrendously with dumb math, but this is
| how I think of it:
|
| Let's say you're trying to build a product/feature. You have
| general timelines for the launch. About 5 years ago, it would
| take a team of 10 to deliver it. Now, let's assume there were
| productivity gains, and you can deliver it with a team of 8.
|
| This would not necessarily be a problem if for 20% of the
| workforce cut, you would also start getting investments and
| create 20% more companies/features. The big uncertainty is,
| will this ever happen, or it'll end up with 10% increment in
| such activities, so you still have that extra person hanging
| around.
| arrowsmith wrote:
| How do we know that the rise in unemployment is being driven by
| AI specifically, and not by wider economic circumstances?
|
| The article's evidence for the AI claim is just "some guy you've
| never heard of says so".
| pizlonator wrote:
| Exactly. I think there are many other factors influencing tech
| jobs.
| jarsin wrote:
| All financial articles use what I call the "as"s reason.
|
| It works like this. Find whatever is hot that day, week or
| month then put it after the "as".
|
| Stock market down as Trump holds another signing. Stock market
| up big as Musk slashes government spending.
| rcktmrtn wrote:
| I also started noticing this headline pattern ("something A
| as something B") all over the place a while ago and now
| automatically break it down as:
|
| * Something A (probably) happened
|
| * Something B (probably) happened
|
| * The author/publisher are slimy weasels and I'm not going to
| give their stupid article any more time
| rchaud wrote:
| You would need to wait for several quarters' worth of labor
| market data and a thorough empirical analysis to see whether
| the hypothesis held up. 2-3 years would need to pass just to
| collect enough data.
| myth_drannon wrote:
| According to the article, the overall unemployment rate is 4%.
| So something is happening with IT jobs, not the economy. I call
| it bullshit that it's the AI, it's the outsourcing/remote jobs
| Spooky23 wrote:
| Companies overhired during the pandemic. Big companies hired
| people to deny their competitors employees.
|
| Also as you flatten organizations and use cloud services you
| can discard lots of people. Every large company had a storage
| team. I worked for a big company that probably had 250 FTEs
| just running storage. Not anymore.
|
| There's also a ton of uncertainty in the US. Everyone is
| banking on a significant correction.
| legohead wrote:
| We don't. Economics is complex and it is extremely common for
| journalists to simply take something and run with it. Even just
| saying "unemployment" needs scrutiny, as there are multiple
| ways to measure "unemployment."
| blueanon wrote:
| I think it could be related. We purchased AI tools - with the
| new expectation - baked into weekly sprint deadlines that we
| will get 30% more work done.
| darth_avocado wrote:
| But AI isn't making you productive, corporate execs are using
| it as an excuse to understaff the company.
| blueanon wrote:
| I didn't comment on our productivity or AI. Just the
| expectation :)
| bogrollben wrote:
| Oof. You got me.
| bongodongobob wrote:
| Well if they have 10 people and were thinking about hiring
| 3 more, now they don't need to because they are 30% more
| productive. Productivity increases don't just cause people
| to be laid off. It means you can hire less.
| rsynnott wrote:
| ... Yeah, but I mean that's just nonsense, and is not going
| to happen. People can expect all they want, but ultimately
| reality is reality.
| blueanon wrote:
| It is.
| lazide wrote:
| Expectations can remain unreasonable longer than you can
| remain solvent.
| trod1234 wrote:
| It is nonsense, but it does happen, and its enabled through
| the decoupling action of business decisions provided for by
| debt financing.
|
| Reality is reality, and in the end you are right, but by
| that time it won't matter; the damage will have already
| been done. This is the nature of cascading failures, and
| delusion, and there are far more delusional people today in
| positions of power than ever before.
|
| Edit: On a separate thing. As an FYI in case you didn't
| know, but it looks like your blog is now directing to a bad
| link on google, or they were hosting it and took your blog
| down.
| rsynnott wrote:
| Oh, huh, yeah, used to be blogger, deleted it years back.
| nradov wrote:
| The financial and business press always invents causes to try
| to explain current events. Like you'll see an article that
| states "stocks fell today due to profit taking". In reality
| journalists have no clue why it happened and just make up
| something that sounds plausible or at least isn't objectively
| false.
| jader201 wrote:
| Actually, it's even more devious than that.
|
| They use wording -- just like this article does -- like "X
| happens as Y also happens".
|
| The keyword being "as" and not "because" or "due to".
|
| It implies causality, by coupling both in the same title,
| without technically linking the two.
|
| E.g. "Stocks fall as rate increase looms"
|
| They're basically just saying two things happened at the same
| time, or one after the other, but one didn't necessarily
| cause the other.
|
| IOW, they know they _can 't_ link the two -- i.e. they _can
| 't_ user words like "because" or "due to" -- but they also
| know that by coupling them in the same headline, readers will
| still infer causality.
| kridsdale1 wrote:
| I have specifically noticed this pattern with the red-flag
| headline word "amid". It always means the beta coeffficent
| is 0 but they want you to think it's 1.
|
| "President announces crackdown on immigration amid ongoing
| success of Taylor Swift's new album".
| reverendsteveii wrote:
| My partner and I make an informal hobby of tracking
| language like that which is designed to sneakily water
| down the strength of a headline. "Amid" rather than
| "because of" is a really good one. My personal favorite
| is "Reports: ". If you just preface your headline with
| that, you can say any old thing you want to and then
| later when pressed on the truth value of it you can
| retreat to the idea that you weren't reporting that as
| fact, you were reporting the fact that other people are
| saying it and you're not obligated to say who or how many
| or any other things that people might be saying. The
| practical upshot is that you as a journalist get to
| purposely induce people to believe something you know to
| be false but no one can technically call you a liar.
| mywittyname wrote:
| I'm glad someone else recognizes the farce that is the
| implied cause-effect analysis of economic trends. "Stocks
| tumble as mywittyname avoids lunch time taco truck for fourth
| week in a row. Taco tariffs feared."
|
| The accurate, but boring headline is almost always, "stock
| (tumble|gain) as algorithmic traders reinforce trend. Further
| news may occur."
| adeon wrote:
| I'm pretty sure I've seen this pattern of "Stocks
| (tumble|gain) as X happened" but then 2 hours later if the
| stocks go in the other direction, there is a new headline
| "Stocks (tumble|gain) as X happened" where X remains the
| same, but tumble|gain got swapped.
|
| I think I originally read that this happens in a book
| somewhere, then observed and noticed yeah that seems to be
| the norm. Not surprised it seems to be same thing in these
| adjacent metric % headlines where there's no proper thought
| if there exists a causal link between X and Y.
|
| I think my brain has learned to recognize the pattern
| "Something rises X% as Thing Happened" and it reminds me of
| that cheeky quote about how every headline that is in the
| form of a question is, ... uh I forgot the full quote. But
| feels like almost this could have some kind of cheeky rule
| of its own, about how no causal link ever exists in a
| headline like this.
| arrowsmith wrote:
| > a book somewhere
|
| Black Swan by Nassim Taleb?
| adeon wrote:
| I think not, because doesn't ring a bell at all. It was a
| book related to stock market though, IIRC it was a
| Canadian author who described their career as a day-
| trader and how they thought of how markets work. I wish I
| remembered better but it was quite long ago, and I don't
| have said book anymore. My book likely came out after
| that book, so maybe my author picked it up from others.
|
| That book however you mentioned, I just looked it up and
| it seems interesting. Might put on my read list.
| mywittyname wrote:
| Michael Lewis wrote a ton on this topic. He's not
| Canadian, but his books are really good, if financial
| non-fiction is your thing. He wrote The Big Short, among
| others (Flash Boys is a good one).
| blitzar wrote:
| More sellers than buyers.
| reverendsteveii wrote:
| Remember that a journalist is someone who sells your
| attention to advertisers, not someone who sells you an
| accurate picture of world events. It's far better for them to
| be wrong about something chaotic and unverifiable like the
| cause of a short term unemployment spike than to admit that
| they don't know. Sometimes it's better for them not to know
| the cause of something when it's mundane and they can bait
| you with the mystery, like the NJ drones that we all obsessed
| over for a month that turned out to be part of an R&D
| agreement that was a matter of public record and could have
| shot the whole story down on day one if it had been reported.
| heroprotagonist wrote:
| This probably depends on how you define "IT". I think for
| employment type stats the list of categories is fairly wide,
| and can include almost anything that requires a computer that
| doesn't fit into other categories (which btw is often used for
| 'exempt' overtime status to put people in on-call rotations
| without resulting in an 'engaged to wait' scenario that
| requires payment for time not spent on a call. because they're
| "experts in IT related field").
|
| But specifically this is probably mostly driven so far by tech
| support industries. "IT" being customer service reps who use a
| computer to respond to chat messages, in some cases.
|
| Or actual tech support that's had its entire entry system
| stripped and replaced by an AI-guided walkthrough of predefined
| steps customers are required to take before they talk to a
| human. This will certainly have impact on the amount of support
| staff needed, even if a portion of that is simply frustrating
| customers into searching for answers themselves.
| mjr00 wrote:
| > Or actual tech support that's had its entire entry system
| stripped and replaced by an AI-guided walkthrough of
| predefined steps customers are required to take before they
| talk to a human.
|
| How much tech support was still in the US though? Outside of
| small onshore teams, frontline tech support for the major
| players was already all in India/SEA. You could replace those
| people with AI, yes, but it wouldn't reflect in US
| unemployment stats.
| bobthepanda wrote:
| there are also internal IT teams at any corporation
| handling a decent amount of electronics for internal use.
| it's possible _those_ are now getting thinned out with AI
| for the super mundane things like "my phone won't connect
| to the wi-fi."
| Spooky23 wrote:
| More than you might think. There are many scenarios where
| US nationals are the only ones that can touch data.
|
| They are replacing second tier people with people overseas
| who interact with chatbots and a limited number of staff in
| the US. So one dude can access customer data, but he's
| servicing a dozen agents.
| billywhizz wrote:
| "Another Reason"....
|
| "Another reason for January's tech job losses was that
| companies began implementing some intended spending cuts for
| this year, Janulaitis said, and many slashed budgets based on
| what the economy looked like during fiscal planning last year."
| trod1234 wrote:
| > How do we know that the rise in unemployment is being driven
| by AI specifically, and not by wider economic circumstances?.
|
| There are several important things to look at that show this.
| First and foremost, IT has about a 40 year history now, with
| corresponding economic data.
|
| In its entire history, its been uncorrelated with interest
| rates and other assets. These correlated assets are what most
| people refer to when they speak of wider economic circumstance.
| The IT industry is uncorrelated with this, with 40 years to
| back that up.
|
| IT labor markets are however strongly correlated with advances
| in information technology. This correlation is found throughout
| that dataset as well, in both the boom and bust cycles.
|
| The deep unemployment which we are seeing here, which doesn't
| include the first batch of laid off employees two years ago [18
| mo], is only correlated and impacted by Information Technology
| advances.
|
| There is only one such major advance that has been made in this
| time period... Artificial Intelligence.
|
| AI has improved dramatically from a modular swappable design,
| and it can replace entry level positional tasks completely. It
| probably won't ever be able to take over the senior level
| positions, or the mid level positions, but that doesn't matter.
|
| The companies involved in integrating these things into the
| production environment have mislead most of their customers,
| and in the process burnt all the bridges. Many of these
| companies market towards replacing workers with AI, grossly
| negligent of the whipsaw they are creating with that misleading
| narrative. In the short term they make lots of profit, while
| destroying the environment they need to sustain themselves.
|
| By choking off the professional development pipeline which is a
| sequential pipeline in developing talent, this leaves few
| opportunities to progress to mid and senior level positions,
| which were few and far between to begin with.
|
| When there is no economic incentive to go into any specialized
| field because AI has burnt the only bridge for a long-term
| career, people don't go into these jobs. Worse, those caught
| surprised by this change in circumstance, who actually have
| sufficient experience to perform at these mid-level ranges, may
| abandon the profession causing exponential brain drain. As
| anyone knows, people age and eventually die. Senior level
| people are at greater risk to this than others.
|
| This inevitably creates a tsunami of cost in those
| irreplaceable positions which cannot be addressed by the
| market, and balloons far above what the market can bare. The
| forward looking expectations have made any labor in this
| industry worth less than AI services, and IT as a general rule
| is a labor multiplier where changes here eventually expand and
| infect everywhere.
|
| Business is not constrained in hiring people because many
| business receive operations funding upfront from their
| financial engineering which often comes from money printers. By
| the time they notice the problem, it will be too late to solve
| it, in many respects its already too late because you have
| people who are incredibly competent, near geniuses, and they
| see no future in the industry and are retraining ahead of the
| curve.
|
| AI threatens society because it disrupts the core pillars of
| society, which is indirect but immeasurably important to
| sustained organization of labor and food production.
| Agriculture is dependent on something like 64 different
| intermediate producers to maintain production levels sufficient
| to feed people.
|
| Failures back to pre-modern industrial technology would mean
| half the people alive today starve to death, no matter how much
| they work.
|
| These are the issues which the article doesn't really touch on
| correctly but its WSJ so what do you expect. Their journalism
| has never really been up to snuff.
| 65 wrote:
| I think the actual story here is big corporations are laying off
| people to invest more in AI, rather than "replacing" programmers
| with AI.
|
| https://www.forbes.com/sites/jackkelly/2025/02/02/google-off...
|
| https://www.forbes.com/sites/esatdedezade/2025/02/10/meta-jo...
| windexh8er wrote:
| Another lackluster article with a number of assertions with AI in
| the headline to drive clicks.
|
| From the article...
|
| > "Jobs are being eliminated within the IT function which are
| routine and mundane, such as reporting, clerical administration,"
| Janulaitis said. "As they start looking at AI, they're also
| looking at reducing the number of programmers, systems designers,
| hoping that AI is going to be able to provide them some value and
| have a good rate of return."
|
| _Hoping..._ - I think this is where "leaders" are showcasing
| their ignorance. They're being sold a bill of goods that, truly,
| doesn't exist at the levels they think it does.
|
| Now, on the flip side, the first part of the paragraph above
| seems plausible. However, these mundane tasks have been able to
| have been automated for a long time. It's just that it wasn't en
| vogue.
|
| Reducing the roles outlined will truly lead to shittier outcomes
| for these companies and I hope the ones that are diving head
| first end up paying the price as it showcases, not their
| efficiencies but their ignorance.
|
| AI has a few great use cases. Replacing IT folks who are skilled
| and can think on their feet are not a prime target for AI.
| giancarlostoro wrote:
| AI is a tool not a worker, you still need people to wield the
| hammer. Especially because hallucinations could seriously cost
| you.
| bluefirebrand wrote:
| Like any new productivity tool, the people in charge of money
| are hoping that it makes people so much more productive that
| they can have one person do the job of several
|
| This still does replace workers in the end. It doesn't really
| matter if you lose your job to an autonomous AI or you lose
| your job because someone else is using an AI to do your job
| and theirs
|
| I don't personally believe AI makes people this much more
| productive, but clearly people in charge of headcount are
| thinking it is
| giancarlostoro wrote:
| Which is really funny because a lot of the times businesses
| don't adopt new programming frameworks until the rest of
| the industry has tried and tested it, but it seems people
| are treating AI like if its a worker, when its closer to
| Adderall for developers if used right.
| almosthere wrote:
| Everyone has this wrong. They are replacing US jobs with jobs in
| Poland. I experienced this first hand.
| whatever1 wrote:
| But that is not new. Tech always had overseas sweatshops.
| India, Latin America, Eastern Europe come to mind.
| Amezarak wrote:
| It seems probable that the trend has accelerated.
| ActionHank wrote:
| I think that businesses are emboldened now because they
| believe AI will bridge the gap that couldn't be bridge in the
| last great offshoring.
| torlok wrote:
| What gap? People all around the world can speak English,
| and write code. The US didn't need AI to push all
| manufacturing to China. You're getting outsourced. This is
| normally where unions step in, but not in this country.
| deadeye wrote:
| It's a cycle.
|
| The US is expensive, so offshore. Offshore projects are
| more expensive because they never work, so come back to
| the US.
|
| I've lived it twice now. We're in the middle of my third
| cycle.
| almosthere wrote:
| Expect this cycle to be perm. The infrastructure,
| education and language barriers are completely gone now.
| This is my third cycle too, and its different this time.
|
| In 2006 the Indians would randomly cut out, couldn't be
| on video (phone only) and had major language barriers,
| and they would join in their evening.
|
| Now in 2024 you're on their schedule. Believe me, those
| people are not staying up late for your 3pm call. Wake up
| at 5am every day to keep your job, you have 3-4 hours to
| work with them.
| gedy wrote:
| Honestly to biggest issues I've had with overseas devs
| and managers (mostly India) is the lying and
| misrepresenting which is cultural.
| whatever1 wrote:
| Honestly the biggest issue is time difference. If US
| corpos were strategic they would have invested in Latin
| America and build huge talent pools there. Same time
| zone, same culture same holidays, same language with big
| portion of the US population.
| ActionHank wrote:
| The gap between experience, domain knowledge, and legacy
| knowledge. If you've ever worked in a large org that has
| been running for a few years these can be significant
| gaps and they are usually filled by having access to
| someone in the office to answer questions.
| gedy wrote:
| Work ethic and trust culture are big ones as well. Though
| admittedly some leaders _love_ the "yes boss" vibe of
| overseas devs, even if they are lying to your face.
| giantg2 wrote:
| What I'm seeing is that previous off shoring was mostly
| done with contract orgs. I'm seeing direct hiring this
| time. I guess for more control.
| ActionHank wrote:
| This will still fail I think, for the same reason
| contracting did.
|
| The churn is real and any offshoring hotbed ends up with
| a lot of competing between big companies for talent which
| then drives the prices up and motivates people to jump
| companies more.
| giantg2 wrote:
| The issues we saw were more about quality. I know churn
| is bad for that, but I think the problem was more related
| to lack of oversight and vetting. This might improve
| that, but I'd probably bet against it.
| almosthere wrote:
| This is true but it had not exploded at rates like this until
| 2022ish. Since 2000 the fed interest rate was effectively 0
| until now. This is causing companies to cut every corner they
| can, which is causing no employment here, and 100% employment
| abroad.
| kasey_junk wrote:
| https://www.macrotrends.net/2015/fed-funds-rate-
| historical-c...
|
| Not true at all. We are in the same regime as the pre 2008
| rate response. We are below the late 90s boom times.
|
| So you'd need some other explanation other than bare rates.
| almosthere wrote:
| Infrastructure for internet access, education in
| programming, and a lot of other things were NOT there in
| other countries in 2008-2012
| bigtimesink wrote:
| The thing the WFH proponents didn't understand was that it
| showed management if you can do your job remotely, Andrzej
| can do it from Krakow.
| gedy wrote:
| I think WFH should stand for Where's Fucking Housing
| because that's like 90% of the "WFH crowd"'s motivation
| from what I've seen - since companies almost never pay
| enough to live near enough to their office. If they did,
| then the price differential between US and overseas would
| be even worse..
| kridsdale1 wrote:
| /s
|
| You see, it's of critical importance that Santa Clara
| valley retain the _character_ of a quaint mid 1960s town
| of single level shops and tract houses. Where jimmy can
| ride his Big Wheel in the Cul De Sac.
| alephnerd wrote:
| > Tech always had overseas sweatshops. India, Latin America,
| Eastern Europe come to mind
|
| But back then, the Engineering Manager or Product Manager
| would remain in the US.
|
| Now even Engineering and Product leadership is being
| outsourced as well, which makes it easier to enforce
| standards.
| lazide wrote:
| How does it make it easier to enforce standards when
| everyone involved is able to collude easier?
| kasey_junk wrote:
| That was not my experience, having worked through 2 other
| bust cycles, everyone said the same things through those as
| well.
| alephnerd wrote:
| As I mentioned in my comment, during previous boom-bust
| cycle, the leadership that had P/L responsibilities
| (Engineering Leadership, Group/Directors PM) would remain
| in the US.
|
| But after the COVID layoffs happened, impacted H1B,
| EB1/2, and O1 visa holders returned to their home
| countries, and then got rehired by the same employers but
| for $60k-130k TC (depending on country).
|
| A lot of mid-late career product and engineering
| leadership was laid of in 2020-21, and those guys have
| now founded the new generation of foreign offices.
| phil21 wrote:
| The difference is that they no longer are "outsourced"
| sweatshops. They are just entire divisions/departments of
| companies with full reporting chains. Effectively
| interchangeable with a US remote WFH employee/department.
|
| I've been employing eastern European IT folks since the early
| 00's as I've founded/worked for remote only companies since
| the late 90's. We were ahead of the game here, and anyone we
| hired was not treated like a sweatshop worker. They were
| hired and promoted like any hire we made in the US and were
| simply called an employee. The talent level was same or
| better than the US talent level for 1/10th of the cost,
| especially at the mid-tier/career level.
|
| The largest issue was timezones, but if you needed to staff a
| 24x7 highly skilled ops team - this was one effective way to
| get a great head start doing so. Plus it was relatively easy
| getting folks to work odd hours if you were paying double
| local salaries.
|
| Since the pandemic things have entirely shifted. It used to
| be large companies/enterprises would offshore to sweatshop
| style outsourcing companies. They had a hard time competing
| with us since the work and responsibility simply did not
| attract the best candidates. We could hire directly out of
| local university pipelines and be extremely picky in only
| taking the top 1% of candidates due to this. After the
| pandemic this totally changed to these large companies now
| competing on salary at levels we no longer found competitive.
| We simply no longer enjoy the strategic advantage of having
| an untapped low-cost highly skilled labor pool in these areas
| any longer. Large companies have more or less adopted our
| model.
|
| It's now not uncommon to have entire teams headed up by a
| highly competent senior VP or C level local leader who
| reports directly to US upper level management. They are
| included in all business decisions as anyone in the US would
| be at their level, and performance is similar to any US team.
|
| I have always (and even written a few times on HN about the
| subject) thought highly compensated US engineers were being
| exceedingly short-sighted in their demands for WFO since this
| was always going to be the outcome in the end. Once you can
| hire someone in the midwest US, it's not really a huge leap
| to realizing you can do the same 2500 miles away in a low
| cost country. There are still tons of labor arbitrage
| opportunities left in the world and the story that there is
| no local technical talent in these places is utterly false.
| It's always been a management problem.
|
| Over time it will even out - and it has quite a bit. Salaries
| are now maybe 1/3 to 1/2 US salaries at the same talent
| level, so it still has a long way to go in my opinion. You
| are only seeing the start of many companies building up long-
| term strategic plans in these regions - these things take
| years to decades to be fully realized.
|
| Most US WFH engineers will be competing on salary/skillsets
| in a world market within their lifetimes regardless of cost
| of living differences. The writing is on the wall, and I
| personally believe the die has been cast at this point.
| swimorsinka wrote:
| I can confirm this. Former Senior Manager from Big Tech Co here
| (I just resigned 2 weeks ago). When I left, we were in the
| middle of offshoring all of my groups to Amsterdam. No stock
| compensation in Europe = cheaper devs. There was no real talk
| of replacing anyone with AI. We all used copilot and the other
| LLMs as tools, but you still needed devs who understood the
| systems and how to debug the generated code.
| alephnerd wrote:
| Can second this as a PM turned VC.
|
| In Cybersecurity and DevTooling we've moved the entire
| Engineering and Product function to Israel, India, and
| Eastern Europe (Czechia, Poland, Romania).
|
| We'll still fund founders in the US, but they still end up
| hiring in those countries instead because you can pay "Austin
| in 2010" salaries and get top tier talent.
|
| 20 years ago, P/L responsibility would remain in the US, but
| in the current iteration, even P/L stakeholders are now
| abroad.
| msthrway8709 wrote:
| Thirding this, group manager at Microsoft. Throwaway as I
| post regularly under my professional account.
|
| VPs have been explicit, in writing, that we are shifting
| heads to lower cost geos.
|
| Hiring has been largely halted in the US for the bulk of
| non-business-critical roles to shift PCNs overseas, and
| there have been multiple waves of US focused layoffs to
| motivate this further.
|
| While offshoring has been a topic for the last 20+ years of
| my career, this time, since 2022 or so, feels different
| even vs. prior recessions, and I expect we'll see
| continuing erosion in the quality of engineering positions
| and careers.
| swimorsinka wrote:
| It's hard to know if this most recent move will be more
| permanent. The irony with Amsterdam was that they had a
| hell of a time hiring. They had to import 80-90% of their
| labor from Eastern Europe or elsewhere and everyone had
| visa issues and would take 2-4 months to start. I also
| think the company will get a rude awakening in a few
| years when they realize they can't just fire everyone or
| do layoffs like they were in the US.
| msthrway8709 wrote:
| Some of the pessimism comes in that I've seen larger
| "centers of gravity" being built in these regions with
| full reporting chains vs. effectively being the offshore
| wing of another team, as well as commensurately higher
| levels of product ownership and growth or traction over
| the last few years.
|
| Additionally, can obviously only speak for myself but
| I've tended to see more hiring in countries without the
| strong european worker protections (eastern Europe,
| Israel, india, asia)
| redphony02 wrote:
| I created an account specifically to reply to this comment.
| I am the Romanian that Engineering got outsourced to. Year
| 2 of college, first job ever.
|
| I feel bad in a way, considering that I probably stole some
| other engineer's job simply because I am cheaper.
|
| It's a moral problem I hadn't(or rather, didn't want to)
| consider before reading this comment thread.
|
| I love the people I work with(both overseas and local), but
| comments like these make me wonder if I've made the wrong
| choice.
| alephnerd wrote:
| > It's a moral problem I hadn't(or rather, didn't want
| to) consider before reading this comment thread
|
| > I love the people I work with(both overseas and local),
| but comments like these make me wonder if I've made the
| wrong choice
|
| It's out of your control as an IC. That said, do whatever
| you can to prepare for the worst.
|
| Your a competent engineer, just like anyone else in any
| other country.
| msthrway8709 wrote:
| As an American impacted by this, I can at least
| personally say that if anything the fact that you got a
| job is one of the few upsides in all this.
|
| I don't begrudge a romanian SWE any more than a US one,
| we're all just trying to get by here, and the fact that
| global megacorps can do currency/economy arbitrage that
| they prevent workers from benefiting from while ensuring
| they have every advantage is by and large not your fault.
|
| It should have been for us as engineers to organize,
| unionize, or legislate protections if we didn't want this
| to happen, and despite advocating this to my peers during
| the boom years, I was constantly rebuffed.
|
| Obviously I put more on the massive companies with the
| power to dictate global laws and trade practices
| gleefully jumping at this, but between that and the
| responsibility I put on my peers/myself to fight against
| that, I certainly don't put blame on you.
| usefulcat wrote:
| I don't think you should feel bad. It's a bit like
| feeling guilty because it's raining where you are while
| somewhere else in the world people are suffering a famine
| due to lack of rainfall.
|
| The only difference is that you have zero control over
| the weather and very nearly zero control over corporate
| hiring decisions.
| jarsin wrote:
| If Putin gets what he really wants that is going to work out as
| great as it did for all the companies outsourcing to Ukraine.
|
| Putin is covertly manipulating Poland with the same games as he
| did with Ukraine. And now it appears increasingly likely he has
| the right guy in the white house to take what he wants.
| torlok wrote:
| Ukrainian companies can just move to Poland. There's a lot of
| Ukrainian IT workers here already, and since long before the
| war started. Putin isn't manipulating Poland, and a full-
| scale invasion isn't "games". What is this nonsense.
| jajko wrote:
| Some big companies already moved when war started. I know one
| major bank moved cca 1,500 IT & support jobs (as in the
| people doing them, often with families) to Prague, I think
| mostly from Kyiv.
|
| Great place for talent, pretty horrible for salaries and its
| going to get worse (from employer's perspective just to be
| clear, all the power to you guys there... I've lived 5 years
| in that city and if you are into European cities and city
| life in general and don't mind having mountains far this one
| is nice).
| vitaflo wrote:
| This. Every big company I know of is offshoring to India and
| Eastern Europe currently. It has nothing to do with AI.
| mywittyname wrote:
| This has been occurring for a while, no? Half of my team at
| an old job was in Romania.
| alephnerd wrote:
| After the pandemic, P&L leadership functions moved abroad
| as well.
|
| A lot of mid-level management on visas were laid off during
| 2020-21 during the depth of COVID, and this had to return.
|
| Now, the SVP for a core Engineering Org or your PM Director
| owning an entire BU might be in Bangalore, Tel Aviv, or
| Cluj.
|
| If ICs to mid/upper level leadership are in the foreign
| office, it doesn't make as much sense to keep hiring
| domestically for Product or Engineering roles.
| mywittyname wrote:
| Yeah. This makes sense, particularly vis-a-vis
| leadership.
| nyarlathotep_ wrote:
| And Mexico City, Brazil, India, etc etc.
| lifestyleguru wrote:
| > They are replacing US jobs with jobs in Poland. I experienced
| this first hand.
|
| Like, only now?! This had been the case my entire career to the
| point I got fed up of rat race to the delight of foreign
| superior, became cynical and unemployable. It's not ey-ay, nor
| outsourcing, it's the economay. We have a crisis, sir.
| jkmcf wrote:
| I haven't experienced it, yet, but for my company it might be
| one of two ways it becomes profitable. The other way is to lay
| everyone off AND offshore work only when the lone remainer
| needs help.
| sergiotapia wrote:
| jobs are leaving the US and going overseas. even h1b engineers
| here are treated like dogs because what are they going to do?
| complain and get sent home? no. they'll work weekends, and 12
| hours days, sure.
|
| and before you say this is false I've seen it firsthand many
| times. personally seen it with my eyes.
| exabrial wrote:
| It has nothing to do with AI, and everything to do with an
| oversaturated market and over-employment. AI is just an excuse.
| RomanPushkin wrote:
| I thought "we gonna have uuuge success, many-many jobs, we gonna
| need many-many people, a lot of people"
| giantg2 wrote:
| AI isn't hitting tech jobs, management is.
| whamlastxmas wrote:
| I would more specifically label it as capitalism and its
| general brutality is hitting it
| giantg2 wrote:
| Unemployment and under-employment are not unique to
| capitalism.
| fitsumbelay wrote:
| No diss to the OP, but is there any point to sharing posts like
| this?
|
| 1) the headline is bait for a story content that's at best
| inconclusive, 2) of the two sources for this story, one analyst's
| point that IT spending on AI outpaced new hires seems to do most
| of the post's heavy lifting, 3) the second source -- an Indeed
| economist -- makes almost the opposite point that after increased
| spending on AI at the expense of new hires, spending on the is
| stabilizing 4) And this entire story appears to be based on *one
| month's worth of job reporting*
|
| I understand why a WSJ reported is professionally required to
| spin something out of a nothingburger and convert attention into
| ad impressions and "provoke debate" or whatever, but for those of
| us uninterested in WSJ or Rupert Murdoch's success this feels as
| unhelpful as that post from a week or so ago about yet another
| (inconclusive A.F.) study on the effects of marijuanablahblahblah
| ...
| stalfosknight wrote:
| Having tried to get AI to do some of my coding work for me, I'm
| not convinced AI is the real culprit. I think this has much more
| to do with the end of ZIRP.
| jll29 wrote:
| I doubt AI has much to do with it. But it may be given as
| "excuse" by CXOs to explain why the cuts have been made.
|
| To add AI functionality, you will first need more developers, and
| a different kind (those that can
| train/evaluate/improve/deploy/integrate AI models) before
| potential savings can be kicking in. Some payback that may lead
| to layoffs could happen, but with a delay. It would be very silly
| to lay off a good developer rather than re-assign them, because
| the cost of hiring them is enormous, and you may not get the same
| quality again; in economic terminology, software engineers are
| "non-fungible resources".
| belter wrote:
| https://archive.is/JNzdD
| yadaeno wrote:
| AI = aggressively offshoring jobs as fast as humanly possible.
| enrio2000 wrote:
| AI accelerated the process, of IT headcount doing down,
| multiplied by outsourcing etc
| pipeline_peak wrote:
| Seems more like people are leaving out of fear more than getting
| laid off over this.
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