alt Hacker NewsIMO the effects of Section 174 are way overstated. Time will tell, but my bet is that the market for software engineers continues to decline indefinitely. Maybe super low interest rates could mitigate the trend but other than that we're probably not going back to the days of high demand software engineering roles.
Why? A dozen different reasons. Of course LLMs are one facet, there's also the commodification of software and infrastructure which means buying something off the shelf is far cheaper than running an engineering org in-house, there's also the fact that the market is extremely oversaturated with software engineers with hundreds of thousands laid off over the last few years, then there's the aggregate effect of advancements in PL and software system design which makes it a lot easier to do more with less, the broader homogenization of runtime systems with modern browsers and mature cross-platform toolkits... and many many other factors. All these trends are converging on downward pressure for demand, and I personally don't see any reason why the trend will reverse.
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Disclaimer, not an economist.
A coincidental combination of economical conditions happened before the layoffs, and I know correlation doesn't imply causation, but these conditions look like a big cause:
* Companies hired like crazy in Covid * Section 174 got disabled * Interest rates rose
This made money much more expensive, and employees became a much higher cost due to the fact you hired like crazy, so you have a ton more, and you can't amortize them, also combined with fears of recession in 2023.
In a very short term, this cocktail of conditions made operating a company much more expensive, thus the layoffs and reorgs as an attempt to cut costs.
What you are saying is also true, but I see that taking effect over a longer period of time.
I don't fundamentally disagree but I feel there's a selection bias at work here. I'm not an economist, but: maybe the things that could have a market bolstering effect are - by nature - harder to identify because they represent growth opportunities that haven't been captured yet? The sector-reinvigorating innovations over the horizon wouldn't be innovations if they were easy to anticipate.