I can assure you a lot of veteran devs in my company who had major impact were let ago because of off shoring to India and Poland. My employer is a very well known financial institution, think Blackrock, Bloomberg etc.
Public press paints picture of the firm laying off due to adoption of AI. Yet, I can assure you without doubt its not because of it but due to continued offshore.
I think we are at the brink of opening another large campus in India, not sure which city. Oh another thing is these full time position in NA were eliminated and replaced with employees from TCS.
My own boss is against it but its coming from higher ups. I have no idea what's driving them. We made billion in net revenues last year and we are actually part of the org that is in 'cash cow' category - upper management literally said this too in our town halls
Let them offshore if that’s what’s going to happen. And then let the stats show that American employment in certain sectors is tanking, and let the electorate decide what to do about that. Basically, I think this is a multi-round game rather than a one or two round game.
As a recently laid of senior engineer, to the extent that my job was replaced, it was replaced with offshore junior devs who'd already been working with the company for over year with a pretty rough level of productivity by man-hour, though maybe taking 3x the time to get things done is worth it if they're cheap enough. Which is to say I see my layoff as as cost cutting backed by a premise that there is no value in retaining senior level talent, to try and keep operating in the black, not because AI was materially producing a lot of benefits. (Because to the extent it was, I was the one reaping them compared to the offshore folks and less experienced onshore ones.)
In my experience, if you're working on a green-field project, you're working long hours, making very little visible progress, you have to write a lot of code, make important decisions.
All the while management is breathing down your neck and asking 'why isn't it ready yet'.
Once the thing is shipped, then all the important people come out of the woodwork, who were surely there all along, 'supporting' you from behind the scenes, there are photo ops and important people shaking hands. If they feel particularly charitable, then you might get a seat at the table. There's talk of spinning up a team around the product, and people fall over each other to get to lead it.
But the thing is, most likely they don't need your expertise any more, not really, once everything works, you don't really have a negotiating position as a dev. They get some cheap juniors to fix the bugs and add the missing feature niggles - hiring 3 juniors might not even be cheaper, the point is management does not have to depend on you, they can play their human resource games.
'But only I can fix that complex race condition, that popped up half a year after development' - well if it was good enough with the bug for people not to notice it for half a year, it's going to be good enough for another half, until the new devs can fix it.
This applies to ambitious feature requests as well - if the code's good enough that the contract was signed, the business requirement was met, they can just kick the can down the road until they can fix it.
> In my experience, if you're working on a green-field project, you're working long hours, making very little visible progress, you have to write a lot of code, make important decisions.
Funny, this is the complete opposite of my experience. Greenfield projects I've been a part of have had a ton of highly visible progress with _frequent_ updates to stakeholders basically from day 1. Same goes for complex additional features.
> 'But only I can fix that complex race condition, that popped up half a year after development' - well if it was good enough with the bug for people not to notice it for half a year, it's going to be good enough for another half, until the new devs can fix it.
From my time at AWS, and in light of the recent DynamoDB dns race condition bug, this is a line of thinking that is problematic.
There is so much complexity in the inner workings of any one of those services. Many of those services are now composed of many teams, each having turned over completely multiples of times.
Yes there are runbooks and knowledge passed down from each generation, to some extent. But when you hit some critical outage, edge case, etc., those people running the systems have such a different relationship to the system having simply maintained it vs. built it.
From a certain perspective, that line of thinking is only "problematic" if customers stop paying. In other words, the product only has to maintain a certain minimum quality threshold and doing any more is a waste of money. I don't necessarily agree with that myself but it is a common attitude.
A old Twitter thread: “what’s one thing you wish you didn’t know about cloud providers? Answer: eventual consistency means it just sleeps and retries all the way down.”
> You have an amazing amount of confidence that the new devs are going to fix subtle race conditions…
> They’ll add a few sleep(5) calls to make them go away though..
I don't think torginus's point is that the new devs will find the proper fixes for the code, more that such a hack might be good enough in the eyes of both the company's management and the company's users.
As much as it pains me to recognize this (as a fan of clean, elegant code) not every bit of software needs to be clean and elegant to achieve its intended purpose (which is, at least in the corporate software world being discussed here, to make money).
If you meet the needs of your software's users, you can make a lot of money for a lot of years selling a piece of crap held together with chewing gum and elastic bands (and many companies have).
Such "sleep(5)" is actually a milestone in a project, a milestone that marks the beginning of deterioration and the end of architectural changes. I've seen multiple pull requests with "sleep" and similar shortcuts, and worse, I've rewound coding agent context and changes because of such model suggestions. I'm responsible for informing management about the consequences of such shortcuts and why we have to take the correct, often more time-consuming and more expensive, approach to avoid project derailment in the long term. I believe that management picks employees. If they don't trust my judgment, then it's okay for me, but I don't feel obliged to be responsible for the consequences.
I'm certainly not defending such code, just saying that its out there and in some very successful projects.
If the managers where you work understand the dangers of taking on such tech debt and are willing to put in the resources to avoid it, consider yourself lucky, because in my experience that's not at all universal, or even particularly common, though it does certainly exist at some places.
IMHO, there's never been a better time to build your own product and learn to sell it. The effort that AI implementation requires is clearly exponential to complexity of the organization.
You can build faster now that you ever have: I am building faster than I have in 25 years of engineering. You have more capable support for all the unfamiliar processes of building a business imaginable.
And almost everyone larger than you is finding it harder to achieve similar productivity gains from implementing AI, if not outright struggling with it. This is a golden moment and won't last long.
I can't agree with this more, and it's exactly both the position and the impetus of my personal action plan for the next several years to come.
Truly, AI levels the playing field, if you just have the inclination to look at it that way. It brings such potential to the right people. In my hands, a software developer who has been slinging code for food for 40+ years, I am a 'god' with a cheap monthly subscription to Claude Code. I can run several projects and keep track of every one of them and see progress like I've never had that chance to, in my entire lifetime. And yes, I still wield the stick, because I KNOW how to do this stuff. Claude really doesn't. Claude just gives me raw material, individual orchestral parts as it were, that I can put together with a conductor's baton.
My enterprise client? They get barebones slop. Enough to keep things alive but yet never be scalable and extendable. And they deserve that. They slaughtered our entire US based team and went overseas. They retain me to keep the wheels on while offshore wires up worthless, unpredictable AI agents to 'enhance' the product. I'm taking their money until I can break free sometime next year. They get the scraps now, and they will never know until karma brings them their bitter fruit.
My personal project. A really, really fun and fluid development momentum. Truly art and logic combined with Claude doing the grunt work for me. Absolutely a blast and it will have a user base, and the user base will really enjoy the results.
New partnerships. You can now make ANYONE you know, that much more viable, that much more tech savvy. As an individual, with your talents and our new little 'digital helpers', you, yourself can become the David to any Goliath you wish. You can help elevate ideas, small teams, and aspiring entrepreneurs and have a blast doing so.
Shed the notion that this moment has to be dark for you. It doesn't. It just takes seeing that maybe, just maybe, the boneheads that are trying to capitalize in these horrendous actions which include lying about AI, lying about the reasons they are laying off, etc. are bringing about their very demise in real time. Clueless as to what they are doing.
And those of us with the knowledge, ethics, high standards, discipline, and honor, are now armed with the very thing that can bring down those who created it to harm us.
I already get multiple cold emails a month selling me some sort of software product or service that I don't need and that wouldn't work for me.
If a bunch of additional people start going and building MVPs, what keeps that from becoming even more of a flood, like what you get if you post a job application on LinkedIn nowdays?
I think sales is likely to get harder, not easier, soon.
And to your earlier post, I think the big question is: can individuals get more done on their own now building new things because of less organizational issues compared to incumbents, or because of less product complexity and scope? Is the organization the problem, or is the complexity of stuff built to try to service a thousand different previous sales deals and customers?
Similar trend at my company - we're looking to hire in India to reduce costs. The rumor is that we could replace 25% of our existing IT workforce without outsourced roles.
If anyone is worried about their job, it won't be AI that takes it - it will be outsourcing. The US offshores 300k jobs per year with a high percentage of them being IT (60-80% depending on source). It's really not that different to the offshoring of manufacturing decades ago. Why pay people onshore when you can pay someone in India half of that? Any job that doesn't require a physical presence or has legal pressures to keep it onshore will be at risk. It will likely get worse over time, just like manufacturing. I don't know what the future will look like if we continue outsourcing everything. It used to be that we outsource primary and secondary sector activies so that we could expand tertiary industries. What are we replacing the outsourced jobs with now?
Offshoring/outsourcing is nice on paper, but as management doesn’t have to deal with time zones, in reality it is much more chaos than expected. And how do they want to deal with fuckups? Thru Slack or Discord? :)
We had British SaaS supplier and all the time I have talked with Bangalore-based people. They had to work in night I suppose…
Hard truths about outsourcing: you’re always dealing with a cultural, political, and legal gap.
Stuff that’s hella-illegal, that not even the remotest WFH citizen would ever try to pull, might look very tasty from another perspective. Economics that favour that cheap labour also means even marginal scams can seem wildly tempting on the other side.
I’ve had two experiences with off-shoring. The first time my former CTO brought in a near shore firm and they worked independently on a large project. There was no knowledge transfer or collaboration with the on shore devs. They built what was asked, it was over engineered and much was built of little value. We still have the software they wrote but it is a liability. The second time, I’m now in the CTO position, instead of having the nearshore people silo’d we work integrated. Everyone is on the same team, code reviews, pull requests, all mutually understood. It’s so much better. It all starts from the top and if you don’t have vision you’re doomed to fail.
I do wonder at times if tariffs and offshoring protection are necessary at a certain point. Forcing a labor constraint on an economy (within reason) can spur efficiency. Accepting high structural unemployment in the name of the free market seems irrational.
My company has been intentionally causing attrition in the US by moving to effectively a 996 style schedule. As people quit, their positions are moved to the India office. It is not an officially communicated policy. I have just surmised this based on private conversations with the executives and what is actually happening.
The way the outsourced companies are structured, the folks who actually know things spend all their time selling new customers/placating existing customers. The moment someone shows promise/that they are actually skilled, they get moved out of the actual dev teams.
This is the same on a lot of larger staffing agencies that promise to have all the people you need and can either do entire projects for you, or get you developers, designers, QA, project managers etc on short notice.
They have a few very competent developers who are primarily in the secondary sales in my experience. First sales contact is between non-technical management and their front-line sales (usually very attractive women). In the second sales contact, technical staff from the potential client is involved and they bring along their real developers. But those are not the ones you'll get on the project. They'll give you interviews with the developers you can get, and they're coached for the interviews and sound fine. But then in reality they are people who can't touch type and develop purely by trial and error without forming a mental model.
If hiring locally wasn't such a mess, nobody would talk to them. At some point even a junior developer is better than not having a developer at all. I assume AI will change that and they'll get replaced first.
I would say it is more sinister than just a cost-benefit analysis and plain racism in hiring. Cheap talent exists in far more places than India but somehow it almost always is India. Not only that but I have seen the strangest LinkedIn profiles where people graduate from no-name Indian universities and get a big-corp job here in the West like it is nothing.
It's not a racism thing, it's because India is in a fairly unique position: their population is so large, that (relatively speaking) the top 0.1% of Indians in any sector tend to outnumber the top 0.1% of (for example) Americans in that sector, plus if an Indian immigrates to America, a company can pay them less than an equivalent American employee (for various reasons).
So you basically can pay an Indian immigrant a junior dev salary, for significantly-better-than-junior-dev work. It's just stonks.
Not even close. We had two offshore contractors working with our team for about two years and they were consistently terrible. Despite this, some higher up pressed us to “hire” them so we conducted an interview. One of them said they had 8+ years of SQL query optimization experience and could not explain what a table scan was. The other claimed to have 5 years of C++ experience and thought a pointer was a url. I am not exaggerating.
Whereas our team’s college intern turned junior dev has consistently delivered increasingly valuable contributions and doesn’t lie to us.
They bait-and-switch like hell. Once the original workers are out of the picture they squeeze the contract like a lemon. The managers involved won't re-hire and more often than not will even hide the mess (for their own sake). The old IBM playbook on steroids.
The Indian diaspora is huge and you have second and third generation folks in executive office all over. As a political force, south Asians are increasingly powerful as well in many states.
There’s a lot of opportunities for personal networks, nepotism and plain old corruption to work. (Who is going to figure out that somebody dropped a few gold coins to your sibling as a kickback?) There’s a much smaller network of people with relationships to Eastern European or other companies.
> There’s a much smaller network of people with relationships to Eastern European or other companies.
Unlike eastern Europe, India is geopolitically in a pretty good spot right now, having decent relations with most developed countries, and not engaged in any major wars with its neighbors. The last company I worked for outsourced a lot of work to Russia. At a certain time in 2022 they suddenly had to shift a lot of that work to... India!
Absolutely. They are in the middle both physically and logically. Notice Trump’s big crackdown barely made a dent - mess with India, and Jamie Dimon and his peers are on the phone immediately… finance depends on the outsourcers onshore and offshore to function.
India’s long term positioning of neutrality and strategy with business, education and politics is bearing fruit.
When talking about outsourcing jobs from the U.S., you’re obviously gonna exclude the U.S. China is also not a factor. Neither are Western European countries or countries like Japan and S Korea because of relatively high salaries. Russia is out due to long standing geopolitical issues.
That basically leaves Brazil and Indonesia as the only alternatives to India in the top 10 and combined they don’t even have half the number of SW developers as India.
You need to then add Mexico, Vietnam, Turkey, Philippines and Poland to the above 3 to add up to the number of SW developers present in India.
Thats why the outsourcing industry is concentrated in India. You can setup 1 office in India and have access to as many SW developers (Indians are also very willing to migrate domestically, so an office in a single city is sufficient to cater to the entire domestic developer market) as you would if you setup 8 offices in & different countries across 4 continents.
> hiring towards this one country goes beyond that it is 'cheap'.
No it doesn't, not materially anyway. Stats can be misleading if you don't pay attention. A lot of the big corps started hiring H1-B in large numbers long ago but since H1-Bs can't easily switch jobs and tend to suck up to higher-ups, soon their mid-management was occupied by H1-Bs.
Anybody who has tried to find a job in such an environment knows the drill - Indian managers hire only Indians and prefer H1-Bs to keep them docile. Salary isn't a consideration there, but it all starts with "cheap" and is sustained by ethnic loyalty and fear of the outsider.
In smaller companies where hiring is more natural, H1-Bs are still payed less and their inability to switch jobs makes them cheaper still.
That's a commonly made argument, but it's innumerate. Low h1b salaries lower local salaries. The reason you hire h1b is because they're cheap, and then the only locals you hire are the ones that will work at the price of h1bs.
Local salaries might even be slightly lower, because you get to hold h1bs prisoner (an added benefit.)
GCCs are expanding in Canada, Ireland, Poland, Czechia, and Costa Rica as well.
Indians are more visible, but salary expections have gotten extremely out of whack in the US, and extended WFH during COVID proved to most boards that companies can continue to operate when entire teams are communicating async.
If a large portion of interns and NCGs in the US are essentially expecting $45-70/hr salaries, it just isn't sustainable especially when factoring the growing skills deficit because universities failed CS students to a certain degree over the past 10 years by watering down programs in a short term bid to compete against bootcamps.
If we are paying Bay Area salaries, we expect performance comensurate to that salary. Basically, all companies are now starting to adopt the Netflix model of hiring in the US.
FWIW, I get on the order of $40/hour as a senior with almost 10 years experience, and it allows me not to worry too much about spending (with a wife earning about a third of my salary and two kids). I think I could easily earn at least 50% more if I wanted to work for some rich but soul-crushing corp, but for obvious reasons I don't do that. I guess US cost of living is just insane. (I live in central Europe.)
> FWIW, I get on the order of $40/hour as a senior with almost 10 years experience, and it allows me not to worry too much about spending (with a wife earning about a third of my salary and two kids)
How much do you pay annually out of pocket for health insurance premiums and other healthcare expenses?
In the US that expense is very high, and is a major source of worry for working families.
I'm similar salary band, I pay 9% of my annual salary for mandatory medical insurance, but it's usually hard to get an appointment in reasonable time so you are going to pay extra 50-100€ for a visit to the same doctor, but in private clinic. And also vaccination and dental is not covered by that 9% payment.
For most white collar jobs like tech here in the US, your out-of-pocket as percentage is income doesn't play a role in how we decide salary bands.
For a family of four, the average health plan is around $10k out of pocket from the employee along with around $20k in employer costs [0]. Yet the median American SWE salary is $187k [1] versus $66k in Poland [2], $93k in Canada [3], and $111k in the UK [4]. Either way an American ends up earning significantly more after healthcare costs and insurance.
The issue is salary expectations at the lower performance band haven't kept up with what is expected at that salary band.
> In the US that expense is very high, and is a major source of worry for working families
When benchmarked against similar peer cities in Canada [5] or the UK [6], CoL is roughly at par yet salaries are significantly higher in the US, especially when comparing peer tech markets like SF [7] versus London [8].
This is the crux of the issue - demanding 100% WFH well past the end of COVID made it hard for us to justify domestic hiring when
1. Async was successfully proven to not impact business operation
2. A reverse brain drain of all nationalities in the US during COVID meant it was easier for employers to work with them to open a hub office or GCC abroad
3. A new grad is demanding salaries that simply don't make the economics of training and hiring new grads work. At $70k-$110k it does, but not beyond that.
4. Companies have now adopted the Netflix model - by cutting low performers, we can actually give higher pay bands to employees who actually have a business impact, as can be reflected in the rise in 75th percentile tech salaries.
> For most white collar jobs like tech here in the US, your out-of-pocket as percentage is income doesn't play a role in how we decide salary bands.
Most people here in the US don't have white collar jobs nor compensation of a software engineer. They work in retail or other blue and pink collar professions.
A Canadian retail worker has much more affordable access to healthcare than their US counterpart.
I think you make some solid points, but there are major tradeoffs some of the data is not totally convincing. If US workers are so much more highly paid than foreign workers, then we can reasonably expect the best workers to migrate to the US whenever possible. It's pretty easy for Canadians to cross the border. So one reason to hire American developers is for quality. The other is simply that these companies exist in the US, which means collaboration needs to be done in US time zones, which makes overseas workers far less efficient, not to mention the major negative impacts on worker morale. So there can be reasons to hire out of country, but the tradeoffs are significant even when well executed.
> If US workers are so much more highly paid than foreign workers, then we can reasonably expect the best workers to migrate to the US whenever possible
Not really.
No one wants to leave their families, and the upper tier of salaries in alternative geos are high enough to capture the higher talent tier because their salary expectations are based on their domestic condition.
On top of that, the US immigration system is severely backlogged. It can take decades for Chinese and Indian nationals to become green card holders, and we as employees increasingly expect foreign nationals to pay the filing costs - not us.
> other is simply that these companies exist in the US, which means collaboration needs to be done in US time zones, which makes overseas workers far less efficient and having major negative impacts on worker morale
Not anymore. WFH proved async work models can ensure business continuity.
On top of that, the bulk of layoffs during COVID were workers on work visas who were given the option to return to their home countries and open an office there.
This is what Google did in Hyderabad, Bangalore, and Warsaw, Databricks in Bangalore, Amazon in Canada and India, and Nvidia in Bangalore.
Furthermore, we as employers don't really sponsor VPs, Engineering Managers/Directors, Product Managers, and Staff/Principal Engineers on O-1 visas. Most are stuck on some form of EB1/2 or L1/2, and those who apply to O1s who aren't founders or extremely critical to the business are being sponsored but filing out-of-pocket.
It just isn't attractive to immigrate to America long term anymore as a white collar employee in most cases now aside from unicorn roles which employees then use to boomerang back to executive roles or demand US salaries in their home country.
Ideally we need to build a domestic talent pipeline, but universities failed severely by watering down curricula in an attempt to compete with bootcamps, which burnt a lot of employers disincentivizing them from hiring early career, and state and local jurisdictions in the US just don't give us the support or pipeline needed to build a competitive early career hiring pipeline.
For example, in cybersecurity, I can hire someone in Israel who has done offensive security work for a couple years in a military, police, internal security capacity or someone in India who participated in one of the dozens of Police Force, Army, or Home Affairs cybersecurity internship programs. Similar programs like Cyberpatriots and the Cyber Incentive Program (approx $100M) were mismanaged as was found in a 2023-25 investigation by the DHS OIG [0][1] and an entire generation of students of cybersecurity scholarships quit in 2016 when the Trump 1 admin cut funding for cybersecurity scholarship programs.
> No one wants to leave their families, and the upper tier of salaries in alternative geos are high enough to capture the higher talent tier because their salary expectations are based on their domestic condition.
For 2x the salary young men have proven time and again they are willing to take the risk.
> On top of that, the US immigration system is severely backlogged. It can take decades for Chinese and Indian nationals to become green card holders, and we as employees increasingly expect foreign nationals to pay the filing costs - not us.
A challenge for sure. This and what you go on to describe could certainly shift some junior labor from H1B to remote contract. I would expect that shift to have a mostly net zero impact on other American exployment.
> > other is simply that these companies exist in the US, which means collaboration needs to be done in US time zones, which makes overseas workers far less efficient and having major negative impacts on worker morale
> Not anymore. WFH proved async work models can ensure business continuity.
Every non-US team I've worked with and everyone I know that works with offshore still have meetings. It would be incredibly dysfunctional to not have any collaborative time.
> Ideally we need to build a domestic talent pipeline, but universities failed severely by watering down curricula in an attempt to compete with bootcamps, which burnt a lot of employers disincentivizing them from hiring early career, and state and local jurisdictions in the US just don't give us the support or pipeline needed to build a competitive early career hiring pipeline.
Is that really what is happening? Because based on everything I can see, hiring standards are the highest they have ever been. As we get older, we have a bias towards underestimating the capabilities of younger generations, because we can see them making familiar mistakes in real-time.
> For 2x the salary young men have proven time and again they are willing to take the risk
First, sexist, and secondly in 2025 there's no guarantee that you would be able to live in the US long term on a work visa (but it's been this way since the mid-2010s), and if someone really feel the urge to immigrate to the West, then Australia, Canada, Netherlands, and Germany are all easier and (excluding Germany) Anglophone (yes, NL is de facto Anglophone now).
The US just isn't as attractive a location to immigrate to anymore for a large amount of people in white collar roles.
For the cream of the crop who primarily target American BigTech (GAYMAN) or HFTs like Citadel or Jane Street, in India the salary and ESPP grant can afford you household help, a nice condo, and make enough money that you can invest in building generational wealth or angel invest. It was a similar story for Chinese over the past 10-15 years as well.
For Europeans and Canadians, both are extremely turned off to America due to the Trump admin, and at portfolio companies we've seen a significant amount of requests from employees to shift away from the US as a result. Even Israelis increasingly don't target the US anymore because of perceptions and have begun choosing Germany, Czechia, or remaining in Israel.
> I would expect that shift to have a mostly net zero impact on American exployment
A lot of senior managers and leadership in tech companies are in the same boat with work visas as I mentioned before. All visas categories go through the same backlog for naturalization in the US - be you a manager, VC, factory worker, or SWE. Heck the creator of PyTorch is himself on one of these visas despite being employed at Meta.
> Every non-US team I've worked with and everyone I know that works with offshore still have meetings. It would be incredibly dysfunctional to not have any collaborative time
Absolutely, but everyone makes time for Zoom meetings and finds a way to make it work, or people like me will hire someone else who can get it done.
> Is that really what is happening
Yes in cybersecurity and a large portion of databases. I even explained why in other HN comments [0]
This is why most of our dealflow is now in Israel, Eastern Europe, and India. Look at recent exists like Wiz ans PingSafe.
Even recent cybersecurity companies that IPOed like Netskope and Rubrik have overwhelmingly hired in Israel or India and with leadership being Israeli or Indian either in origin or nationality.
> Absolutely, but everyone makes time for Zoom meetings and finds a way to make it work, or people like me will hire someone else who can get it done.
So we are in agreement that work cannot be fully async.
There are clearly some forces at play that are changing how immigration works in the short-term. I think where we differ is mostly this: our anecdotal experiences are radically different (I would say competency is increasing not decreasing as a general trend) and I would never bet against the momentum of the US long-term, nor do I believe that quality tends to remain steady or increase with offshoring. Maybe things are different in your niche. I appreciate being given a view into a different perspective!
> I was making $50/hour fresh out of college back in 2014. And I worked remotely.
Same for me, except out of high school, and a decade earlier.
That's the sordid tale of the industry. Outside of a handful of FAANG high flyers, pay, in real dollars, has been very steadily decreasing over many decades. But it took high inflation for us to notice.
Now we're in a difficult spot because we feel we need to make more to make up for the considerably higher cost of living, but there is no market willing to pay more — and never was.
The market can bear to pay high salaries for the right talent.
If you can show me you have tangible development skills and can think about the product or feature you develop as a business (eg. Can you justify to me in financial terms the net benefit doing a refactor does versus keeping the status quo) you will be fine.
We aren't going to pay you $300k-$400k TC just to be a code monkey. We expect you to be able to help inform actual business decisions and not be a PITA when thinking about the core metrics that matter for a business - NARR, FCF, and COGS.
So, being a developer who is specialized in a business domain (eg. Being a fullstack developer but with a decade of experience working on Cloud Security products) makes it easier for hiring managers to decide whether or not to hire you. And as a former PM, those kinds of Engineers are the best to work with becuase they understand the pitfalls that exist in a subdomain and have opinions and the ability to justify them.
Those who can upskill or show the ability to upskill are also worth their weight in TC.
And finally, you will have to be located in Tier 1 tech hubs now (Bay Area, Seattle, Austin, NYC). The 5-7 year blip of satellite offices in RTP or Denver or Portland or being 100% WFH in a cabin in Montana is over. The roles at these kinds of offices are the ones that get offshored first.
> And finally, you will have to be located in Tier 1 tech hubs now
Exactly. Adjusted for cost of living, $300,000 in SF or NYC is about $170,000 where I lived back then, so ~$80/hr. Which is, after adjusted for inflation to that time... You guessed it: $50.94/hr!
And you're pointing at high quality talent with considerable experience, not some kid out of high school. Said kid out of high school like I was back then isn't going to find that much in today's market. As you point out, the market has tanked big time — and has been tanking for decades.
As before, we're only just now starting to notice how far behind we’ve fallen because of things recently becoming exceptionally more expensive.
> Adjusted for cost of living, $300,000 in SF or NYC is about $170,000 where I lived back then, so ~$80/hr
I've lived in SF over the same time period as well, and my CoL hasn't changed aside from rent - I've kept the same consistent savings rate - but even rent was largely manageable for me because of job opportunities and a mix of local and state rent control.
That said, I do think being Asian or Latiné means having different buying preferences (eg. the bulk of my shopping is at ethnic grocery stores and my "white people food" is primarily sourced from Costco or TJ).
Ofc, looking visibly ethnic also gives me the ethnic discount at most places I shop at.
> Said kid out of high school like I was back then isn't going to find that much in today's market. As you point out, the market has tanked big time — and has been tanking for decades
Oof, that is actually a good point. Sadly, you are right about that. I don't think hiring managers in the US would take a risk on hiring a HSer even if they have the right skills and domain experience.
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That said, I am starting to come around to your argument.
London and Toronto have a similar CoL as the Bay Area and $45/hr is a mid-career tech salaries in both Greater London and GTA.
Edit: can't reply but every single white collar job provides an employer healthcare plan that is equally as competitive as the public healthcare plans in Canada and the UK.
And especially if you were being paid $50/hr as a new grad in 2014.
Edit 2:
> And I was in Michigan.
All the more reason I would have pushed back severely. It's easier to find talent at scale in London or GTA - metros there have a population larger than the entire state of MI, and with a breadth of options beyond UMich Ann-Arbor.
$45/hr is low for GTA. I was making about that in Toronto in 2017 with two years experience, one year vocational degree, and a bachelor's in a completely unrelated field.
The vast majority of jobs in America give healthcare. The quality is vastly superior to London and Toronto, although we pay far more (and our medical professionals are upper middle class rather than middle / lower class). However this is a huge hidden portion of salary that most are not aware of, about $25k for a family of 4, which increases labor costs greatly.
On sheer metrics of access and quality, America kicks the shit out of Europe and Canada
Jeez--I was making $50/hr in 2004 in one of my first jobs after I finished my PhD and opted out of academia. That pay didn't go that far back then!
This is what upsets me about my career--that logistic pay curve. You initially grow fast and then it tops out and never gets better, but your costs keep rising, particularly as you have a family. I'm paying for one kid's college tuition right now, she has 1.5 years left, and will then enter a dubious job market. My son is 15, so if he goes to college, I won't be paying tuition for him until Fall 2028.
The problem is, I'm no longer a developer. I'm currently a nothing working on figuring out "something." I have a lot of skills and talents, but seemingly not many that will pay. I'm looking at any 2yr. training program that can get me certified to do something useful. It's so freaking bizarre to be sitting here with a degree in CS/Math, an MS in Computer Engineering from a very reputable university, and a doctorate in Information Management, also from a very reputable university, and looking at basically doing blue collar work! My nation has utterly failed me in every possible manner.
I should add that we are looking to move out of our fairly high-cost of living state for a possibly lower cost of living state, but there are complications to that plan, too. My wife doesn't really want to move our son out of the high school he is in. I'm saying that other imperatives need to be addressed before they become full-blown crises. I'm being taxed to death, and costs like insurance are rising fast.
> My nation has utterly failed me in every possible manner.
We've failed ourselves too, though. If I was some random person with endless money burning a hole in my pocket, what would I even do with a CS/Math/Computer engineer/Information manager? It is in no way clear how life is improved by working with such a person. Other industries put a lot of effort into marketing what function they serve. Said random person knows exactly when and why they'd want to hire a plumber, electrician, structural engineer, lawyer, accountant, physician, etc. But us...? We've rested on our laurels thinking Google, Microsoft, and Meta will forever want us, putting no effort into expanding our market.
GCC - Global Capacity Center, basically instead of outsourcing to WITCH or EPAM, a company creates an entire office abroad that owns profit-loss, product roadmap, has executives present, and is a direct part of the company.
NCG - New College Grad
You ain't dense btw, it's a good question. Keep asking questions!
You can consider it a branch. It has all sorts of advantages like tax avoidance (you pay them the expenses - salaries and office cost - and zero profits to pay taxes on), you can fire them all if you want, especially if it is fairly small and replaceable. And you can sell the dream of promotion space in a large company, but they will almost never get that. And you cut the middleman and keep the money.
> sorts of advantages like tax avoidance (you pay them the expenses - salaries and office cost - and zero profits to pay taxes on)
Nope.
Subsidiaries need to pay domestic taxes which in a lot of cases are significantly higher than those in the US. That said, countries like Czechia, Poland, and India help by covering the cost of each employee per head depending on amount spent.
> you can fire them all if you want
Nope.
In my past experience, we need to follow domestic labor laws and they do not budge on hiring or firing in Czechia, Poland, Israel, or India. Ofc, the financial hit of hiring the wrong person is much lower there than in the US, and unlike the US those jurisdictions provide a single window or tribunal dedicated to disputes foreign investors may face.
Same with the UK and the film industry.
-----------
Basically, American jurisdictions became significantly non-responsive to services businesses after COVID and the 2020 election because white collar industries just didn't matter politically speaking (they represented a fraction of hiring and jobs in most competitive seats).
The same kinds of hand-holding support I mentioned above used to be provided by jurisdictions like NC, the Bay Area, NY, TX, etc, but local politicians don't care anymore and local and state governments are severely backlogged and attritted significant amount of personnel who understood business promotion.
The big issue with outsourcing to WITCH or EPAM was you were essentially paying $30k-50k per head but getting the lowest tier of talent becuase those companies would pay around $5k-15k salaries to maximize their margins.
As such, companies decided to just open offices in India, Poland, Czechia, etc to poach talent in those countries because people are only productive if well remunerated, and remove the middle man out of it.
Ofc, the traditional Indian outsourcing companies like TCS [0] and HCL [1] have also begun pivoting away from Software outsourcing towards becoming end-to-end chip design companies, Infosys pivoting to becoming an end-to-end MedTech company [2], and Wipro becoming an aviation and defense manufacturer [3][4] because of a mix of Indian government subsidizes and Taiwanese, Japanese, and American FDI.
All Western countries are devaluing their currency. No other way to reduce the debt. Cutting benefits is political suicide. Taking every dollar from billionaires would knock a 1 year of debt off. The solution is inflation
The response is inflation. It would only be a solution if it works, and of all the countries or empires that tried it in the past you'd be hard pressed to find one that succeeded at correcting their economy long term by debasing their own currency.
It may be a short term solution, on the right time scale I'd give it that.
The only way its a long term solution is if globalization is so fundamentally different from what other countries and empires have felt with that they can actually devalue at just the right rate to bring work back here.
Getting that rate right seems like a tiny needle to thread though, and that only works if this situation is different from when other currencies were devalued intentionally.
I think you might be confusing 'devaluation' with 'loss of spending power'. The dollar hasn't really lost value compared to other currencies. The thing that would do that would a loss of faith in the US to pay its debts, not the inability for the dollar to sustain a certain purchasing power.
We have already eaten a ton of inflation, particularly in the first year or so when Biden was President. Trump printed trillions to forestall a collapse during covid. The wisdom of that move is lost on me. I would have preferred the collapse--we might be recovering by now instead of sitting on an even higher precipice awaiting the inevitable fall.
There is an interesting argument to be made that they have no choice once the problem passes a certain point.
The interplay between bond yields, the fed funds rate, and inflation can lead to weird situations. Right noe the Fed is having to lower rates because (a) job numbers are pretty bad and (b) the US debt is held in a surprising number of short term bonds and higher rates make the debt just rack up faster. They're also watching inflation continue to chug along higher than their 2% target though, a scenario they'd normally raise rates for.
I won't be surprised if we ultimately realize that, in the end, those in charge had way less control of the economy than they like to claim. I'm biased though, that's always been my view and it frustrates me that economics claims to be a field of science at all. It can be a very interesting and important historical analysis but it isn't predictive, and at the level of macroeconomics it can't realistically be isolated and tested.
London has a similar CoL as San Francisco yet tech salaries are around 33%-50% what are offered in the Bay. Same with Toronto.
On top of that, both the British and Canadian governments give some degree of tax subsidy and regulatory support, though not to the degree that India, Israel, Poland, Czechia, or Romania provide.
Why should I pay Jeff from NCSU a US$175K TC in RTP when I can get Jane who chose to return to Toronto after living in the US working for large companies throughout her 20s?
A lot of techies on HN really underestimate the amount of reverse brain drain that happened during and after COVID. The COVID layoffs in early-mid 2020 primarily targeted those on some kind of work visa, and a number of those laid off were given the option to take a pay cut but also open a node in their home country.
Edit: can't reply so replying here
> I hear this, but the fact is a 70% pay cut in the Bay Area would simply not be workable at all
This is why we began opening offices in RTP, Denver, Chicago, NYC, etc in the 2017-22 period because we could pay closer to London or Toronto salaries back then in those offices and we had state level support.
All of that went to the wayside after COVID because a large portion of our workforce reverse braindrained, and someone in RTP demanding WFH and a Bay Area salary in a metro where CoL is comparable to Fresno and where we had to spend significant amounts of capital in commercial real estate to unlock tax benefits is ridiculous.
We are fine paying high salaries and TC, but it needs to be justified by actually high tier talent. Think the Netflix model.
Yeah I'm surprised to hear London has a similar cost of living to San Fransisco. I wouldn't expect someone working in tech in SFO today to be able to stay there at 33-50% of their current salary.
The expansion of Indian offices is a result of the reverse brain drain that accelerated during the early COVID layoffs along with the EB1/2 backlogs - a number of Staff and above Engineers, EMs and above, and Sr PMs and above who were on work visas were either cut or given the option to relocate to India and start a hub office.
A similar trend happened in other countries, but India being so large means they get overshadowed.
[3] Never even heard of Cato Networks, and no figures. So irrelevant.
[4] onsemi manufacturing $2bn, not relevant as this is manufacturing numbers (Apple India is expanding multiple times that)
[5] No numbers, 2,934 employees. Mentions increment 20% of local market and an acquisition. Not relevant.
[6] Amazon plans 8,500 employees in the two [Canadian] cities. Meanwhile "Amazon to invest $233M to strengthen India operations network" https://www.aboutamazon.in/news/operations/amazon-to-invest-... (OTOH: they are laying off 800-1000 in India, out of over 15,000 desk employees just in Hyderabad)
[7] Uber to invest $200 mln in Turkey. Peanuts compared to the billions in my links.
From your submissions it seems like you are Indian or something.
A friend, senior engineer, was laid off sometime ago. He was replaced with an offshore junior dev. The strange thing was that he was located offshore as well. What actually happened was that his company had to pay 50-60% of US salaries and RSUs etc to hire and retain talent at these offshore centers. They decided that was too costly and hiring an outsourcing outfit to pay 10% of US salaries instead.
With AI even dumb people feel smart - thanks to the overconfident answers, I am expecting this to be race to the bottom. Even the highly skilled offshore employee is not safe. Middle managers crunching numbers and looking at the bottom line might be convinced that if AI + less experienced but cheaper "human in the loop" can produce "similar" result at 10-20% of the original cost then that is worth it. I am personally dealing with such middle managers nowadays day in and day out. They seem blown away by Copilot demos and keep pushing "savings" and don't seem to understand AI hallucinations at all.
Hacker News doesn't like to hear it, but remote work is a big part of this. All that effort convincing management you're just as effective working remotely was also a collective sales pitch to outsource your role.
Outsourcing comes and goes in waves. Good talent in India and the Philippines tend to work for FAANG companies, often at very comparable salaries to the west.
The remainder of the talent tends to struggle with some of the outsourced work, but with AI they can now give a semblance of competence.
In the UK a major retailer, Mark and Spencer got hacked after outsourcing work to India. They couldn't fulfill orders online for months, and they are now reducing the amount of work they outsource to India.
We will see something similar happen to other companies in a year or two, but until then we just have to tighten our belts and hope we don't get layed off before then.
They do though. My company hires in India and has had a hard time retaining talent there because anyone with mediocre talent can get western salaries by switching to larger companies than our own.
We've lost a decent number of engineers to Google, Facebook, and Amazon in India.
My company wants to pay roughly $50k USD in India per dev and that's just not enough. They've tried to compete by making nicer facilities and better in office benefits (like a cafeteria) but it's just not enough.
FAANG may offer those devs more than your company will in India but I'd be very surprised if they offer them similar compensation to FAANG devs in the West and specifically the US.
> Outsourcing comes and goes in waves. Good talent in India and the Philippines tend to work for FAANG companies, often at very comparable salaries to the west.
In those locations?
Based on sheer CS grad numbers why wouldn't companies just shift their r& operations there then?
> Based on sheer CS grad numbers why wouldn't companies just shift their r& operations there then?
There are lots of CS grads, yes. But most colleges out there are mostly degree mills, and this carries on to the workplace, where your average software engineer or engineering manager has very little understanding of what they’re actually doing (this[1] article was posted on HN, which will tell you the quality of engineering in India).
For anything slightly complicated, companies seem to be only interested in hiring from the best colleges and pay out of their nose in the process. A friend of a friend does some hardware work at a FAANG, and gets paid at almost that level.
Conversation about outsourcing aside, it isn’t fair to pick one example and generalize to say an entire country’s talent pool is poor.
The US has the best engineering talent pool in the world and you can find dozens of examples at major companies as bad (or worse) than the one you linked.
The FAANG I work for is trying to do just that. But while new grads are indeed a dime a dozen, you can't staff an R&D with only new grads, and finding and retaining skilled seniors is so tough that it has resorted to offering US-based Indians packages with US level comp to entice them to move back for a few years to bootstrap teams.
> In the UK a major retailer, Mark and Spencer got hacked after outsourcing work to India.
Does sound more like correllation than causation. Was there evidence that the Indian devs made the mistakes that led to the hack or was it just the good old 'let's fall back on racism to avoid blame' by management? I still remember the articles where Boeing tried to peg the 737 MAX crashes on Indian engineers who worked for $10 an hour.
Its more about social engineering (this was the case for the m&s hack), if you outsource your work, you have less visibility over the people that work for you and it becomes more of a black box. This leads to worse employee awareness in general.
> Good talent in India and the Philippines tend to work for FAANG companies, often at very comparable salaries to the west.
As other commenters have pointed out, this is simply bullshit. Good talent in India and the Philippines earn nowhere near US dev salaries. Unless by "very comparable" you mean 1/3 - 1/2.
Yeah. One of the most ridiculous things in my entire life of 40 years was seeing 90% of my fellow SW industry workers using the 2 or so years during/after COVID where we had more power than we’ve ever had to advocate hard for making ourselves much more easy to replace by insisting on remote work, and insisting on reducing our productivity (even if not actually, at least in the eyes of the employers) so we couldn’t justify our higher salaries anymore.
1. It enables them to live in lower cost of living cities. This makes them more competitive relative to outsourcing because a lower wage in a cheaper city goes farther.
2. It opens up the job pool. If you work remote, you can work at any company that takes remote workers regardless of where you live.
3. It reduces the cost of switching jobs. Many people are stuck in jobs they don't want because there are few other local opportunities and switching jobs means uprooting and moving. For a single 20-something in an apartment, that doesn't sound so bad. But once you have a partner with their own career, kids with meaningful friendships, a mortgage, etc. then moving can be extremely disruptive.
In general, more job flexibility increases the efficiency of the job market for employees.
1. The cheapest American city is maybe half thr cost of the most expensive. Meanwhile in the most expensive Indian city, one could live like a king at 1/3 the cost of the cheapest American city with far more culture and things to do. And if you were willing to move to the cheapest Indian cities you could halve that again.
2. Correct. Given that the majority of SW jobs, especially the highest paying ones, were located in the U.S. this is a net benefit to anyone living outside the U.S. even before you take cost into consideration. More American jobs opened up to a Londoner than global jobs opened up to someone living in SF.
3. Efficiency approximately = lower costs. In this case costs = developer salaries.
So you’re right. We got more efficient. We reduced the average cost of developer salaries per job. Since very few people are willing to take a pay cut this means jobs are moving/will move to places where people are willing to work for less.
As someone who is Indian and frequently visits the sub continent (writing this from a suburb in Delhi) I can categorically tell you that no one actively wants to live in the cheapest Indian cities (just left my family’s home city which falls into this bracket).
I’m not sure if you’ve travelled much around the sub continent but I’d say you’re quite badly romanticising it. Yes we have our own culture which is different to that of the USA but, as with all things, there are A Lot of aspects of the culture here which are not admirable.
Well, no, not really. Top tier Indian cities like Bengaluru, Delhi and Mumbai are expensive and horribly dysfunctional when it comes to pollution, traffic, hygiene, dealing with government bureaucracy, etc. Having money insulates you from some but by no means all of this.
Real estate is about 2x-1x the price (I bet the cheap stuff is much worse than in the US though).
Cars and more expensive big purchases are cheaper in the US. And don't forget, the US has absolutely first-class-bar-none access to financial services, with abundant cheap loans, so you can support a much nicer lifestyle on the same income.
> More American jobs opened up to a Londoner than global jobs opened up to someone living in SF.
As someone living in EU and working (and job hunting) for American companies for the last N years I just have never seen it happen. American companies were opening subsidiaries in Europe long before COVID - they were just making everyone go to office there. Surge of remote work didn't seem to bring new American jobs to Europe as far as I could see - if anyone was hiring remotely, it were the same companies that already were hiring for in-office jobs before. Meanwhile, most remote jobs by American companies seem to be open for American residents only.
Thing is, for most locations, you still need to establish a legal presense to hire there, and that is enough of bureacratic burden for most companies to expand their geography very sparingly
Efficiency does not necessarily mean lower costs. More efficient workers could mean more valuable workers, and thus something employers are willing to pay more for in a competitive labor market.
>In general, more job flexibility increases the efficiency of the job market for employees.
It increases the efficiency of the market as a whole, but that's not the same as saying that first world software engineers (already highly paid and previously protected from foreign competition) would be better off.
Claims 1 would be difficult to back with evidence.
Some may accept a significantly lower pay (to go such a long way), but many wouldn't.
Overall my observation is that costs of living doesn't proportionally follow compensation. The far stretched example is how offshore staff often live in countries with costs of living at about a fifth, earning a third of their counterparts in the U.S or other top paying countries
Of course for skilled jobs perfectly doable remote such as software engineers.
I may be biased by the fact it also makes sense, a worker understands the value provided to the business is more or less equal, and since we live in a market society, why wouldn't it be expected to earn the same. In effect we don't earn the same no matter the location, but it is somewhere between that and aligned to location comp.
I find that some tech workers don't understand economics that well. In general more efficiency for an industry means less wages per unit of output worked across a whole industry. The benefit of "efficiency" usually accrues to customers of a service, not providers.
Efficiency benefits society at large, at the expense of the people being made more efficient. This is just capitalism and the result of price (and also sometimes societal respect) being a function of scarcity of a product/skill.
There's a reason construction unions, doctor's associations, and the like exist - to promote members interests (i.e. predominately money). If you can cartel an industry to produce lower efficiencies; assuming that a disruptor can't break into your market and ruin your party your members will accrue higher salaries and usually given our system more respect from peers in society. Locally I'm hearing "get a trade"; and when I say I'm a SWE people sneer - the respect for the profession IMO due to "efficiency/AI" has crashed over the last decade.
> when I say I'm a SWE people sneer - the respect for the profession IMO due to "efficiency/AI" has crashed over the last decade.
Tbf, a lot of SWEs sneered at other professions getting automated by AI - even on HN.
There isn't much sympathy to be given to SWEs and techies simply because we are paid significantly higher than other white collar roles with comparable or worse working hours like accounting, marketing, other engineering disciplines, dentistry, nursing, and even various subfields of medicine like primary care physicians.
A lot of techies who are complaining on HN need to realize that in reality they are the elite even though they don't think they are.
Why does Jeff in Cary NC deserve a $200K TC working 40 hours and remote first and just a BS in CS when a CPA at PwC makes $120K TC with added debt from a masters in accounting, a Management Consultant at BCG makes $175K TC with added MBA debt, an Biomedical Engineer at Biogen earning around $120K TC with added debt from bio undergrad and grad school, a journalist working for a local newspaper earning $30k-50k with debt from journalism school, and a teacher earns $50K with debt from getting an education credential on top of a bachelors?
I started a company during COVID and we hired: one engineer in SF, one in NY, three in different areas of Israel, plus co-Founders in Boston and Baltimore. There’s no way we could have hired all this specialized talent in any one city at a price we could afford. I also missed the in-person dynamics, but I can’t imagine how you’d build this kind of team without remote work.
Startups are a different deal. Everyone knows everyone, people are hired for their specific talents, management barely exists, there are no executive types disconnected from the reality in the lower levels of the company, no turf wars of middle management, etc. (This is why I prefer working for startups.)
Big corporations are the opposite. Doing something that looks good locally / helps a quarterly report but works to the detriment of the company as a whole is often par of the course :(
Sure, but many companies outsourcing aren't looking for the best, they are looking for the cheapest, and surprise-surprise the cheapest are not the best. Some of them are goddamn awful - close to zero value, but upper management typically never hears about that and just thinks they are saving money because they are cheap.
There is also a big difference in mindset between an employee hoping to advance their career at a company, trying to become a SME, pushing initiatives, incentivized by stock grants, actually caring about customers, etc, and a vendor employee - even a good one - to who this is just a temporary gig, and has no vested interest in the quality of the codebase or building value for the company.
In many companies there is little flow of real information from the bottom up. Upper management only hears what everyone understands they want to hear.
If the top down message is "this is the direction, make it work", and people further down in the hierarchy understand that the boss doesn't want to hear that his plan (e.g. hire the cheapest to save money) isn't working, then he is not going to hear it.
Companies don't even care, honestly. Some have uptime requirements that they get fined over if things go sideways, but besides that, they don't even care.
It was going to happen anyways. I was working remote 2-3 days a week before 2020 hit and that was mainly due to how bad my commute was time-wise. It was exhausting. But it's because the team I was working with was all in other cities and countries and so I was driving to an office location just to badge in. I barely even talked to anyone there. It became a terrible job for that reason alone. Much of what made my career was developing professional contacts and colleagues and Covid took all that away from me to the point that it killed my career. Now a lot of us are in the same situation and I'm here to tell you, I think this is it--it's never coming back this time. You can hope it does, but hope is not a strategy.
The people I worked with were pretty distributed before COVID--partially because functions (and geo regions) were distributed anyway--and partly for other reasons. When COVID hit there was basically very little effort to co-locate most teams. Some companies did try to pull people back but in a lot of cases, it was a matter of RTO but that was a good way to do a mass layoff. Many companies didn't want to do that.
I did (and sometimes still do) attend professional events but the level of interpersonal-contact pre-COVID was gone long before I semi-retired.
This argument would make a lot more sense if you replaced remote work with unions. All that power and opportunity and they squandered it thinking their bosses and management was on their side.
Go ahead, downvote. As if working in the office would have magically protected you these layoffs.
> The only way to stop the race to the bottom in wages and standards is for working people of all races, religions and immigration status to stand together
> Find resources to help union members know their rights and ensure they are prepared to defend themselves and the immigrant members of their families and communities in the event of workplace or community raids
What about this one that explicitly advocates for non-Americans?
Imagine if there was a push to create a professional organization to handle qualification, certifications etc. Like there is for doctors, dentist, accountants and other fields
Only in America is this kind of anti-labor sentiment masquerading as "if you knew what was good for you now look what happened", as if businesses were so stupid as to be fooled by "if we don't make it apparent, they won't notice" and somehow this would shield programming from off-shoring. The actual reality is that post-WW2 exceptionalism in literacy ended; the developing world caught up. The entire premise of American labor exceptionalism was built on this faulty assumption. And rather than reconfigure your negotiation as labor, your first thought is how you can get back in the good graces of the 'big boss'.
I spent some time consulting over the last few years. So many companies are laying off their US engineering teams and replacing them with offshore teams. There used to be this notion that offshore meant lower quality but it doesn't seem like that as much these days. I've worked with some Ukrainian teams for example. They're 20% the price of Americans, produce the same quality, work harder, and speak great English. It seems like a no-brainer to go offshore.
There is an eternal cycle between uncomfortable and productive and comfortable and lazy.
15-20 years ago SWE work was brutal and paid OKish, but not great if you calculated the hourly.
Then the era of free VC money came, culminating in the pandemic boom, where people were crash coursing JavaScript to land a remote job doing 4 hours of work a week for $170k.
The pendulum is now swinging in the other direction.
Before the first dotcom era, software jobs paid like most other professional office jobs. Decent money but nothing really remarkable.
With the dotcom boom and VC money, that changed. I doubled my salary going to a startup in 1998. I was not a better developer all of a sudden, it was just that startups had piles of money and investors demanding that they spend it.
15-20 years ago software development was still very well paid compared to 30 years ago. And then the really insane FAANG money started flowing.
I worked in software 15-20 years ago. The work was not "brutal". I worked hard, but mostly because I enjoyed the work. I lived in a major American city and my pay was essentially the highest pay you could get outside of professions requiring professional degrees like doctor or lawyer, or some high finance positions. And even then, I made more than some doctors in lower-tier specialties.
Offshoring didn't start in Covid and it still has the issues of time zone, culture, etc.
You're not wrong in that companies are looking to hire in cheaper geographies but I think the remote aspect is just a small part of it. Another part is that SV comp has shot through the roof because RSUs. There are also arguably more and better people available in the cheaper geographies.
But it's not a zero sum game and there are still a lot of tech jobs in North America. AI hasn't reduced that total number of jobs.
No one likes to hear it because it's not a part of it lol. Paying fair market wages is different than trying to exploit differences in vastly different standards of living between very very different economies.
Talented workers get talented pay -- a fact many company's and execs don't like.
It has very little to do with their literal position on earth in relation to a company's real estate foot print.
Workers need to be more intelligent and what was that word you used in your comment... "collective."
The U.S. managerial class has been GORGING off worker's labor for decades and workers are about to have nothing to show for it.
As someone who over the past couple of years was responsible for some of these hiring decisions, it absolutely is a part of it ... lol.
I've worked with absolutely fantastic developers in Argentina, Poland, Romania and Ukraine. You're right, talented workers get talented pay, but talented pay in Romania is a lot less than talented pay in San Francisco. Teams are used to working entirely remotely now, videoconferencing software is great, and teams mostly align to US timezones (not entirely, but for example Eastern European workers shifted their day a few hours later so we get at least 4-5 hours overlap every day).
I think companies are a lot smarter about outsourcing now than they were 15-20 years ago and focus more on developer quality, but I've absolutely seen that a company will be much happier to hire 2 excellent senior devs from Poland for what you could get for 1 junior college hire in a high cost of living area in the US.
I think you're contradicting yourself or getting some wires crossed.
>You're right, talented workers get talented pay, but talented pay in Romania is a lot less than talented pay in San Francisco.
But this is due to again, vastly different standards of living in different economies. Geo-based pay ranges have always been a thing, but I think it's a bit reasonable to draw the line here.
So it's not:
>it absolutely is a part of it ... lol.
Because you're not hiring people from elsewhere because of "well I don't need people HERE anymore." The calculus is the same it ever was, even before COVID.
Companies were already out-sourcing before great video conferencing software or an understanding of how to work with remote teams.
It's an exploitation of different economies, at the expense of the American working class.
It's the same thing, just under a shiny new label designed to absolve the managerial class from said exploitation.
I don’t think anyone is arguing that the basic idea of offshoring was invented after the COVID pandemic… But rather that workplaces and workforces geared towards remote working has made it more feasible and accelerated the process
Is it really hard to understand that the infrastructure for remote work, which I think everyone would agree got a major upgrade during the pandemic, would also make it much easier for companies to outsource software dev work?
Pre-2015 or so, yes, of course there was outsourcing, but it was honestly a major PITA in most cases. Most communication was done in conference calls, very little group video communication, lots of async chats, etc.. Any type of work where you needed a fairly frequent black-and-forth with various team members was rarely outsourced - the type of work that was outsourced was the type that was more likely to have static requirements.
But now, though, there is basically no difference working with a colleague who's working from home in the same city vs. working from home thousands of miles away (as long as there is good timezones overlap). And that is a change that only happened around the beginning of the pandemic, and I've personally seen companies much more willing to outsource because of it, and they're outsourcing a much wider type of work (e.g. brand new dev work that is frequently updated based on usage metrics) than they would in the past.
>Is it really hard to understand that the infrastructure for remote work, which I think everyone would agree got a major upgrade during the pandemic, would also make it much easier for companies to outsource software dev work?
No, because it wasn't actually upgraded.
Like be honest, the shift into remote work wasn't surrounded by massive tech advances or upgrades. All the tools that existed for remote work had been there, largely in the same fashion and capability, for decades.
So when you say the infra. and tooling has improved, you need to be specific because it's very hard to point to anything that was fundamentally or notably improved in the pandaemic around remote work.
It all existed before. It was all used before. If you weren't using it before the pandemic that was by choice, not because it didn't exist.
Everything from our communication software, to developer collaboration tools, to how org's track and manage their employees all existed well, well before the pandemic.
It was a cultural change -- not a technological one.
> And that is a change that only happened around the beginning of the pandemic
I'm not sure what you're basing this on. Especially someone's that's had to work with peers across the globe for 4+ decades -- the tools have always been there.
> Companies were already out-sourcing before great video conferencing software or an understanding of how to work with remote teams.
And those experiments failed in the 2000s.
But in the 2020s with an extended pandemic lockdown over 2-3 years, async work was proven to succeed.
I am one of those decisionmakers and the pandemic effect did convince the last stragglers that offshoring by directly managing a subsidiary in Poland, India, Czechia, Israel, etc with ex-American leadership is good enough.
I warned about this during COVID on HN and was downvoted constantly.
Pretending that the 2000s-era experience can inform decisions we make in the 2020s is completely flawed.
Being in denial of the "brave new world" is only going to do you harm as an IC.
Right, but, to be clear, that's not what happened in the case of the original post. They claim they were a senior dev who got replaced by several less effective junior devs.
He's likely talking about strategic not operative management. Not the Team Lead of a dev team, but VPs, department heads, C-levels etc, the kind of people who set quarterly goals and sign contracts.
They're an insular and distinct class unto themselves usually, and there's very little movement (or and very different candidate pool) between devs and them.
For India they culturally value different skills and roles. They value pair programming and treat great ideas from juniors as a negative. Japan has a different work culture that doesn't fit the open model in the west.
The issue in the EU is local EU companies don't pay as well because they don't have to (little competition). And a culture of not paying high salaries but paying higher taxes.
Admittedly privileged counterpoint: I want to work with the best co-workers in the world. Most candidates I’ve interviewed both in the US and in other countries aren’t anywhere near that level. If just anybody will do for a job, I’ll probably get bored and frustrated by it.
High pay has been a mixed blessing for the tech field. For every aspiring top mathematician or physicist who’s been tempted by the pay and relevant new problems, I often feel like we’ve gotten 10x as many people who would otherwise have been uninspired doctors and lawyers or top business majors.
Yeah, it is shockingly bad. I’m assuming you’re using “talent” euphemistically here.
For a recent job opening I was looking to fill, HR sent us all of the applications rather than doing their own filtering (they did first round calls with people engineering highlighted).
The level of resume spam is absolutely staggering. So many applicants to jobs that have no obvious connection to their stated skills & experience, with job application questions filled out by LLMs. I’m not saying they’re all bad people, but all of these people who don’t know what they’re looking for other than an income is really disheartening.
Remote work and outsourcing are two very different beasts, and companies have outsourced long before remote work. In fact, remote work is rarely an option in countries where outsourcing happens because the quality of high-speed internet isn’t uniform enough for folks to be able to just work from home.
Additionally, companies can’t just hire individuals in other countries. They have to set up business entities and that costs significant money to do. It’s why they mostly work with outsourcing companies, who often do have offices where these people come in and work.
Everything about this is the opposite from my experience.
No one is talking about outsourcing to body shops like the old times a decade ago. I went from employing offshored devs and IT talent competing with low-effort body shops, to now competing directly with the largest names in the industry for those workers.
It is not hard at all to employ people “directly” in most countries. Plenty of global payroll services that will handle this for you at a small scale, and you just stand up a local “office” with a cheap office manager and attorney on retainer if you outgrow that. The legal entities and structure might be opaque, but the end result is effectively direct employee as far as anyone working with them is concerned.
Offshoring does not mean what it used to. These people are treated and expectations are the same as anyone employed from Iowa or California. The largest difference and source of friction is timezone.
Reliable internet is more or less ubiquitous in the entire world now in any even moderately sized city. It’s not 2005 any more. This is utterly a non-issue. And this was before Starlink. A $200/mo paycheck bonus usually covers this anywhere I’ve done business.
I’ve worked with hundreds of folks around the world at this point. The HN take on outsourcing is so ridiculous to me, and explains the hubris you see here regarding remote work.
This is absolutely my experience as well - so many posts on HN are just in denial or clueless.
> The largest difference and source of friction is timezone.
Completely agree with this, and that's why I've seen much less desire to outsource software work to India or China (like I did in the 2001-2012 timeframe) than I have to Latin America or Eastern Europe (or heck, even Western Europe where dev salaries are still much lower) for US-based companies.
Cannot fully agree with this. I've just been fired from remote job. My remote contact position after 4 years was replaced with internal full-time position. I could convert to employee if I was willing to relocate to Bratislava and take a huge pay cut. I'm in Eastern Europe already, but cannot agree to €40k salary offer.
It's not like they don't have money, it was an insurance company with $1bn in quarterly profit. Market is extremely unfavorable for IT talents currently.
I'd be more inclined to work in the office if most of my coworkers weren't in India anyways. I can't exactly have water cooler talk with Manglesh while he's asleep on the opposite side of the planet. At least at home I don't have to spend 10 minutes of each meeting finding an empty conference room and getting the audio/video setup to barely function.
If you do work with folks in India a lot, it is a really good boost to your group productivity to go visit them in India, as an IC programmer. It is a safe place, people are very good at hospitality, and you can forge much stronger bonds of connection and of shared technical vision when people are people not just arbitrary strings in Slack (video conferencing can sustain connections but it is hard to make them over laggy video at inconvenient times of day).
I have been working from home to various degrees since 1997 or so and I go in more when I need more work to do and work from home more when I am super busy with coding stuff or similar that can be done better and faster from home.
But yeah going to office to sit in meetings with of people in other offices is silly.
physically being in the office is irrelevant. I can and do have water cooler chats with my remote teammates in the same tz as me while Manglesh is asleep in his
There are plenty of studies showing that remote work increases productivity that have been published before or after COVID, and similar case studies showing the dangers of off shoring. In a perfect world, a business that correctly understands these studies would be rewarded.
> All that effort convincing management you're just as effective working remotely was also a collective sales pitch to outsource your role.
Here’s the thing though. People have been trying to outsource software development since the late 90s. Every time I’ve been around offshoring efforts wherever they were implemented, a few years later onshoring would happen again. It turns out time zones, thick Indian accents, and poor quality control have been and still are major obstacles to overcome.
One of the most myopic self-owns by a certain segment of industry I can think of in my lifetime.
I guess folks really did think that location had nothing to do with Silicon Valley paying 4x or more the worldwide average. That there was simply no talent anywhere in the world who could even compete at their level. No project managers anywhere who could do the job for less than $200k/yr.
One the dam broke and it was clear that remote work could be productive it simply opened up a rather insular industry to extreme worldwide competition. Far more smart and talented folks out there in the world than many anticipated.
It wasn't a "self own" unless you're taking the perspective of Covid. Remote work was forced onto sceptical employers due to shutdowns.
The industry suffers from fads and cargo-culting. Stealth diffuse offshoring is currently in, it's going to take a while for the downsides to percolate: I suspect will mostly boil down to jurisdiction impedance mismatches. What does it mean for employers if it is 1000x harder to extradite an employee to Delaware (or whatever jurisdiction is agreed to in their employment contract) if they clone their product from code? Without e-Verify, what are the chances that your remote employee is a North Korean unit, or working for your competitor? Boom times ahead for corporate intelligence - as well as the traditional kind. How many security teams and policies are geared to face Iran as an adversary? An unstated e-Verify benefit is free FBI COINTEL
There was and is a collective push to show remote work is just as effective as in-office. To the point of absurdity, where there were never any benefits to office work.
It was absolutely a self-own. People not understanding why they were being paid the salaries they were and how replaceable they might be.
It was more or less an entire workforce demanding that their job positions be opened up to global competition thinking there would be no negative long term outcomes from it. They effectively helped offshore their own jobs.
This is just starting - inertia is a thing, and it takes years to stand up competent local engineering teams in various countries. The past few years has simply been laying down the base infrastructure for what is starting to visibly happen today.
By no means universal. I was increasingly remote even before COVID because I did a lot of business and other travel--even if I was never officially fully remote until very late in the game. Never moved from the house I owned through a number of jobs with better and worse commutes. But, then, didn't live in California though did live in what is generally considered a tech center.
I think it's both more simple and more complex than AI or out-sourcing, though these are symptoms. Leadership everywhere is just kind of moving further away from reality, and don't care about progress, results, or fundamentals as they focus more on optics and spin, and controlling narratives or choices. Circular financing, ad fraud, trendy scam products or whole sectors.. does anyone want to do anything real when it's easier to make huge profits being fake? Enshittification is another sign of the times, but that's just about products and platforms, we need a better term. That leadership really wants a scammy rotten economy/product/company which ignores quality isn't that surprising, but the extent to which investors and even workers are often onboard too is surprising. Vandalism economy? Expertise simply isn't valued for the same reason that enlightenment values and rationalism generally are on the decline, in SWE sure, but also just in general.
I didn't think about that but you may be right. I think what might be non-debatable is that setting up the ability to work remotely definitely makes it easier to outsource someone's job. Whether that's causal or makes sense with other factors would vary company by company. Remote jobs are easier to outsource, though.
One of my friends from school has long worked in robotics. He showed me a machine he programmed to cut glass or something at a Volvo factory. I asked him about outsourcing back then. He told me his job required being physical plant to assess, program, and monitor it. He was going to stick with that over the higher-paying alternatives that he believed would be outsourced or automated more easily. Today, outsourcing only threatens work opportunities for one of us.
The era of American developer exceptionalism is over.
Talent abroad has access to the same tools, education, and increasingly, network. American engineers will be replaced wholesale with overseas engineers that cost a fraction of American labor.
You can hire talented React engineers for $50k that will work harder than their American counterparts.
It's not just React. Overseas markets have DevOps, SREs, embedded, systems engineers, you name it.
For years Americans joked that overseas labor was subpar. It's not, or at least it isn't in today's world.
If software engineering is not special and can be done by anyone, so can any other role in a business. So it follows that all American roles will be offshored eventually, including ownership of the company itself - or American businesses will be universally out competed.
> If software engineering is not special and can be done by anyone, so can any other role in a business.
Indeed, however other business roles have a significant physical presence or face to face component. Sales & marketing, legal, HR, and significant parts of operations and admin have physical presence requirements in most businesses. I would expect finance/accounting to be vulnerable to offshoring, though.
Any company not selling software for $$$ is hopefully not paying bay area salaries for their engineering team.
Mid west engineering teams are low six figure or even lower. The cost savings from outsourcing a team of people earning 90k is meh compared to a team earning 300k.
Aren't there certifications and stuff? I'd think that from a regulatory and legal compliance perspective it'd be better to have Americans handling the books. Say someone turns out to be cooking the books, if that person is halfway across the world good luck prosecuting them (unless your company is wealthy enough to the point where you can mobilize law enforcement to do your bidding)
Perhaps someday. But for now the USA has broader, deeper, and more sophisticated capital markets than every other country and economic bloc. This is one of the key reasons why most of the largest and fastest growing tech companies are still largely owned and located here.
That's really interesting. I did not know that India used commas for numbers like that, 3 digits and then 2 digits, and then apparently 2 digits again?
I am a European, so may be wrong, but it is my understanding that Indians have intuition around lakhs (100k) instead of thousands/millions. Apparently 100 lakhs is a crore (10M), but I haven’t seen that used so don’t know how prevalent it is - lakh is very commonly used though.
Because most of the smartest people in the world moved to the U.S. because of the education system, great access to capital, and the fact that they and other smart people could easily move to, live and work with each other in the U.S.
The U.S. also has the largest useful single market in the world (the EU is broken up across many languages/cultures, China is isolated so you can’t really expand out).
The U.S. is actively working to destroy several of those planks right now.
Even the capital plank, which superficially looks strong, is being hurt by the government picking winners and choosers. If the current govt bets don’t turn out to be the right ones we’re looking at an ugly, probably tax payer funded (OpenAI has already hinted at this) collapse.
> Jobs that have a high 0-1 component will still be in the US but jobs that are more 1-n may be offshored.
It used to be (since at least mid last century) and 0-1 and 1-n jobs were focused here. The world becoming smaller allowed a lot of 1-n jobs to move abroad. But we kept 0-1 jobs here.
That used to be the situation when the country brought people from around the world to be educated and then start business here. And historical precedent allowed us to continue thise advantages by having a reputation for it and continuing to support it. Our country for some reason now has decided it no longer wants to take the actions that fill the pipeline for 0-1 innovation.
And the world just like it took over 1-n is going to take over 0-1.
Why you would choose catalyze that change as an American, I have no idea.
I think there are people that generally believe that there is magic dust that says it can only happen on US soil instead of there being structural actions taken to enable it.
We will all very quickly learn that 0-1 can be anywhere that 1-n is.
It is less so about skills of workers. And more so about having lot of investors who are willing to throw money at everything and then even more after the fact. Or to just outright having enough money to buy out the better ideas.
That's not even close to remotely true. If that is the case, why is the UAE throwing their money at US startups and not their own? They have more than enough "capital".
The ramifications of losing all or nearly all of the tech jobs in the US is that the last "good" place to find better paying work that had a fairly low barrier to entry is now gone. I think that has major consequences for the US economy. I'm 52 and I can't just go back to school and re-tool to become a doctor or a lawyer now. I spent so many years becoming excellent and what I do, including higher degrees and certifications (I never really believed in certs, mind you, I always thought it was a giant scam).
Everything I look into as far as 2nd career goes has a very high barrier to entry and then there's the ever-present ageism barrier to fight, too.
I'm fortunate in that I have enough money to maybe just be retired, but most of you aren't anywhere close to being that financially independent. It's going to be ugly.
I knew for years that the offshoring blitz would finally reach critical mass and I was correct. Now it is an economic conflagration.
It's worse than that. Who is going to pay the doctors and lawyers (and other folks providing services) if there are no more US jobs that product stuff for export.
And it's not even about services. Who is going to pay the home builders, electricians, plumbers, etc in a world where there is no money flowing into the US economy from the outside
This is a big issue for young people, too. Every white collar career path is very on-rails now - you're expected to get a degree in XYZ and then get a fresh grad job as a Level 1 XYZer and so on.
So the stakes are drastically higher for 18 year olds picking their college majors. It's effectively a life commitment for a specific career path, and there's a lot of anxiety among students because they don't know if the career path they're betting the farm on will still be be viable by the time they graduate. There's also a sense that if you can't manage to find work in the field you majored in within a year or two of graduating, you've fallen off the track and are condemned to DoorDashing forever.
I'm always amazed at how many older people I know (especially 60+) spent their twenties directionless and then started a decent paying career in their 30s, often by simply learning how to do something and getting a job doing it. I'm not sure what policy platform would make that possible again, but accomplishing it would alleviate a ton of the anxiety that young people have today.
Maybe, but I was looking for a job recently and most "remote" jobs from US companies were still US-only. Some allowed for hiring people in US timezones or close (basically the Americas). Very few were open to anyone in the world. I get the impression it's mostly the admin hassle that makes most companies avoid it.
Nah, none of this is precisely true. Even if the folks abroad are just as skilled (true), they aren’t as effective because of primarily time zone differences and also language barriers (which is exacerbated by the time zone differences).
sure but people on the other side of the world are harder to communicate with for practical reasons like time zones and also for cultural reasons that matter big time in many markets
For certain types of projects it's possible to accelerate delivery by using a "follow the sun" model where at the end of the workday each team hands off tasks to another team farther west. This will obviously decrease productivity per team member due to additional communication overhead and increase the risk of errors, but the trade-offs can be acceptable if the project has to hit a fixed external deadline. Doing this successfully requires a high level of project management discipline that most organizations lack.
> sure but people on the other side of the world are harder to communicate with for practical reasons like time zones and also for cultural reasons that matter big time in many markets
That's a pain management are willing to inflict upon /you/
Yeah this is the reason most offshoring projects ultimately fail to deliver the promised savings. The overseas staff can never be as effective as folks in the same time zone.
Offshoring is valuable not to save money but to increase the development and operational bandwidth of the organization. This truth may not be known to the decision makers, but it is clear to the workers over time. It does increase the cost of coordination and the difficulty of establishing a common technical vision, but these are mitigatable by for example sending entire software project to one region, with the colocated workers having a higher degree of autonomy to make decisions. One way of partitioning work that fits with the power dynamics is to have all the new shiny things done in North America and mature profitable software is owned by a remote region. Half smiley but this effect is real.
This is my conclusion as well, get the cost center down to good enough after threats from competition is relatively secured.
I think this is going to be a new golden age kf innovation. Lot of senior engineers capable of pencil whipping microservice infrastructure paired with industry experience means startup mill goes brrrr
Or it's just plain, boring cost cutting because finance is looking down the barrel of a grim YoY outlook. Companies are hurting, and GenAI can't get people to spend more money with them.
The regressive housing policies on the west coast are going to completely destroy our international competitiveness.
Salaries for tech are 2x what they should be just due to housing costs.
Seattle used to be where bay area companies relocated teams to because the cost of living here and salary expectations where 2/3rds the bay area, but that ship long since sailed.
Asinine short sighted city councils will be the death of all our jobs and also the death of the only remaining industry that America is competitive in on a large scale.
Don’t you have this backwards? People want to live in the bay because it has high salaries education etc, so the housing market is competitive. Everyone wants to live there
Yes. There is a supply problem hindered by politics. But even if all the construction in the world happens, would you be able to buy a 3 bedroom house in SF for 400k? Not a chance. Everyone wants it.
A 3 bedroom townhome in Seattle (actually Redmond WA, more expensive!) when I graduated was 350k, and that was already an inflated housing bubble price. My starting salary was 85k at Microsoft.
If 20k people move to a city each year and the city only approves 10k new buildings, the city is sabotaging its own growth.
Saying "we don't want growth!" doesn't work. Prices shoot up, wages increase, cost of living goes up, the price of everything goes up, eventually it becomes unsustainable and the entire economy crashes.
If 20k people want to move to a city, built 25k housing units. Keep it simple.
Expedite permits, hire more inspectors, simplify building codes, do whatever is needed to ensure people have a place to live.
Exactly this, articles of that tone are starting to surface. AI is often the pretext, because it makes sense to replace labour with technology. The dissonance is why those who make layoff decisions refuse to accept reality, that AI does not replace staff.
One thing also contradicting the "AI can do it" argument, is that a business's playbook is to rather expand the work force in order to multiply the effect of technology. Yet they lay off in waves.
There is no dissonance, just a disguise: Several big tech companies in the US cut their workforce, in the US, while expanding it in countries where talent is cheaper.
Paradoxally, junior folks have it even worse. It has become very difficult to land a job without experience, again, in the US. It all makes sense, if you replace US based senior staff with Junior staff on different time zone, and having a different culture, you are left with nobody to mentor and supervise junior so staff.
I still can't explain how ending up with more Junior staff, offshore, less senior staff and little to no Junior staff locally will pay off in the long term.
I guess I will figure that out, but for now that's one piece of the puzzle I can only call an "economic downturn" outlook.
I was told that the main reason the “Who is hiring?” thread (and other job boards for startups) has much fewer remote positions that are global (the vast majority is Remote US now) is because of a legislation that reduces a fiscal incentive when hiring software engineers and the reduction is much more aggressive when the engineers are from outside the US.
Doesn’t it affect big tech companies? Only startups?
I would guess the opposite, with big companies being much more savvy and influenced by fiscal incentives.
one of the main drivers is companies like Deel that make it very easy to hire remote workers anywhere and I think AWS will soon launch a similar service
If Amazon’s layoffs aren’t AI driven, and AWS is making more money than it’s spending on AI infra… how is Amazon evidence of AI spending replacing jobs? This is an interesting topic, but this particular article left me pretty unsatisfied, it feels like juxtaposing a bunch of barely related numbers with some very popular talking points, but no new information? It hints at “AI washing” without doing any digging at all, and cites the MIT study without noting that it’s getting a ton of legitimate criticism. Is AI really a sideshow or an excuse for layoffs that big companies were hoping to do anyway, is it taking the blame for low confidence in the economy?
AWS is making more money, they are not making money running llms. The companies didn't want to reveal internal procedures and exact profit/loss statements, is that surprising to this article writer? Sorry but MIT is more trust worthy than this stonk pumper site.
> Sorry but MIT is more trust worthy that this stock pumper site.
Oh I totally agree with you, this was just the first thing that came up in a Google search. The criticism of MIT’s study has been going around widely, this site isn’t the only one saying that this study lacks objective metrics.
Tbh AI and layoffs aren't direct consequences of each other imo. Just think back to the 19th century where automation started taking factory worker's jobs. Eventually society learned to deal with automation and even though by pre-industrial standards, 95% of the work that was done by humans to make goods is done by robots and machines, yet there are orders of magnitude more factory workers at least today than were back then.
I don't necessarily believe this is the best explanation but: We know the economy is doing pretty poorly and tech companies are consolidating. Amazon is losing it's two main drivers of revenue: Irresponsible startups with huge AWS spend and no pressure to optimize their stack and consumers buying treats online. Regardless if people are spending on AI, the only thing businesses are investing on is AI and analysts at AWS are likely signaling that many AI companies are not seeing a large ROI and model developers will likely build their own versions of successful products (Claude Code). AWS doesn't want to scale up it's GPU fleet and be left holding the hardware bag. Amazon can't juice numbers for consumer purchases since the rest of the economy is contracting, most people are losing jobs, etc. So the easiest way to for Amazon to juice their metrics is to offshore office work that can be done anywhere. They can claim they are using AI - but from conversations with friends who are working at Amazon this does not sound very realistic - and ride the AI bubble with no liabilities.
Large companies add and remove jobs all the time. It's just the the latter gets much more media coverage. Jobs are always being created and destroyed, for all sorts of reasons.
I was laid off recently along with most of the tech team (Australian company ~ very well known brand). There's a handful of people left, but even they know their time is coming soon.
And this isn't about AI (well, not primarily anyway). It's offshoring, offshoring, offshoring.
IMO, what's taking place now is absolutely transformative and the world economy is in the process of being reshaped. It's not just tech jobs that are being offshored - we're just one of the first/early movers. Many other professional/white-collar jobs (accounting, etc.) are also getting offshored at an accelerating rate. And it's happening all over the western world - it's happening in the US, it's happening in Australia, Canada, the UK, etc.
And unlike previous periods of mass offshoring, I don't think the jobs are ever coming back.
These new tech companies/existing companies were not here for the first wave of offshoring engineers many years ago. basically, the product/service degraded and they brought the product/service back onshore.
It's a cycle that will repeat. Product degrades, there will be public outrage, then they will onshore the product to fix the problems caused from offshoring.
IMO, things are different this time (as someone who has been in this industry for about 20 years now) and I don't see these jobs coming back.
For one, many of these companies are now used to their tech teams being remote. The tools, culture, infra, etc. over the last ~5 years has all become remote which lessens the shock of going fully offshore.
Two, many tech teams in the western world are already partially offshored and have been for some time now. I know where I worked, a reasonable % of the team was already offshore in low COL countries (India, etc.). What's happening now is just the expansion of that cost saving after initial testing of the waters was successful.
Three, the quality gap between offshore teams and their western counterparts is now much smaller, and AI will be used to lessen the gap even further (along with just throwing more bodies at each problem which you can do when your salaries are 1/3rd of what they are here).
Four, many products/services now have captured markets with strong network effects, which means they can weather a heavy degradation of services with little to no loss of customers. It's called enshittification, and businesses are doing it now because they absolutely know they can, and get away with it.
It is interesting that a similar thing happened when millions of manufacturing jobs were offshored to China and other low-cost sites. Now it has come to the tech industry, and every other industry where it is possible. It hurts when it comes to us. (Speaking as a person in tech in high COL). I hope we will find other roles as people found when they moved on from manufacturing roles too
Yep, sold to DAZN. Who in turn do all their development out of Hyderabad, India. Almost entire tech team locally is gone now with handover done to that team.
That's an interesting point that I haven't considered before: that the narrative of AI replacing jobs plus the widespread cheating in school using LLMs is making students less engaged and new graduates less employable, becoming a self-fulfilling prophecy for AI.
This is one of the aspects of AI ethics that I don't think gets nearly enough attention: the general psychological effect that information about AI has on people, regardless of their interactions with the tools themselves.
Students getting lazy, or dropping out of subjects entirely because they don't think they have a future in them.
Depression and a general feeling of despair. I see this in programming communities quite a bit - people who see LLMs as an existential threat to their careers and that they have wasted their lives getting good at something which is now being devalued.
"ChatGPT psychosis" - where people talk to LLMs and have unhealthy thought patterns reinforced by them to disastrous ends - gets a ton of coverage. But what about these milder but still meaningful effects where the very existence of AI disrupts people's future plans and self-worth even if they're not using it at all?
I keep remembering this clip in these discussions:
> I went through this Ford engine plant about three years ago, when they first opened it.
> There are acres and acres of machines, and here and there you will find a worker standing at a master switchboard, just watching, green and yellow lights blinking off and on, which tell the worker what is happening in the machine.
> One of the management people, with a slightly gleeful tone in his voice said to me, “How are you going to collect union dues from all these machines?”
> And I replied, “You know, that is not what’s bothering me. I’m troubled by the problem of how to sell automobiles to these machines
It's like when we forgot all things that we can google, but on a much, much greater scale. For example, multiplication by heart. I think oral, in person examination should be used with students whenever possible, in order to deal with cheating.
If others are slacking, it's an opportunity to level up and stand out.
Also, IMO there are market forces currently reshaping the jobs landscape, it's not only AI, I don't even think AI is the main driver.
No one gets fired for tuning out of temporary tuning out of his smartphone or doing chores the classic way I guess. ;)
I use mobile services timeboxed and in conjunction with blockers for certain services. I also went back to use old-school pencils and paper for work whenever possible. It is helpful - and fun.
I don't see the relation. A "ghost job posting" is not evidence of recent graduates failing to meet the requirements of the past; it is a job posting an employer has no intention of filling to begin with.
> Surely this would be indicated by a glut of unfilled job postings.
I posted a link about Ghost jobs. Then, you said:
>[...]it is a job posting an employer has no intention of filling to begin with.
GP' comment speaks to recent graduates feeling less engaged. Whether it's because they fail to meet the requirements, or the requirements are literally fake doesn't matter. AI isn't used simply to cheat on coursework, but also to erect a de facto glass ceiling viz fake jobs with fake requirements, engagement suffers.
A little bit off topic: but I couldn't even start to read the article because "I reached my article limit" out of I site I never visited before... What are they using to determine how many articles I've read?
Opening in a private window solved the issue, however I'm pretty sure I don't regularly read anything on this site (maybe never was an overstatement?).
Yes, the thought crossed my mind too... But then I tried a private window and it opened, so maybe the other suggestion that the cookies are very long lived is right.
At the fortune 500 I work at there's no sweeping layoffs that I've seen. There is a big emphasis on AI, but more relevant to the concerns, there are scoped hiring freezes for US workers, new offshore hires are greenlit though. And I can't help but wonder, what happens to a state when most of its critical infrastructure directly depends on another external state.
Lost my previous job not to AI but to a pincer movement of Indians taking up positions here in the UK effectively forming a bridgehead to subsequently have the non-management roles outsourced to India. From purely my own anecdotal experience, I found my Indian coworkers very friendly when I could provide something, but once they had the whip hand their attitude was markedly different.
A lot of “AI” investment in countries like India is just annotation and labeling kind of work .
It has so become huge there, that is getting to similar size as the traditional call centre industry, hundreds of thousand of people work on curating data for model training.
Google hiring a senior lead who can scale low skill business processing massively is just inline with that.
Any compute investment is largely local . Internet and Electricity is expensive and erratic, there is red tape, loads of import duties, there are dozens of cheaper places for cheap data centers.
All this to say it is not the kind of outsourcing you think it is.
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There is a some amount of high tech outsourcing happening, those are driven by challenges in getting even a business visa in last 5 years.
those numbers are quite small in aggregate won’t be news worthy.
India simply does not have that kind of high quality talent pool .
The education system is both expensive and very poor. There is shortage of qualified teachers, even bigger shortage of good ones. Students and parents just want to get a “degree” /maximize scores to get a job, There is little interest to learn.
Given that this is presumably all data used for RLHF'ing, I wonder how much of this is responsible for things like LLM "sycophancy" or the issue of "hallucinations". What if the reward-hacking entity isn't the LLM/optimizer but the human annotator in the loop.
> A lot of “AI” investment in countries like India is just annotation and labeling kind of work .
Then why are they giving one year of free accounts for developers to the whole country? Remember they have about one million CS graduates every year. Do you see the scale of costs?
This is a sales tactic, in the same way that Jetbrains and Microsoft will give out free licenses for students in the hopes that some of them will go on to work for employers who will then buy the product. It also helps convince investors about potential growth and MAU increase.
Same goes for the OpenAI and Anthropic office announcements posted by the GP, these are sales offices with very little tech employment or outsourcing happening.
Re “investments”: these are also not what you think. I remember when Amazon was partnering up with schools in the US to provide “machine learning education” where said education was thinly veiled ads for managed ML services like Sagemaker and Rekognition. I wouldn’t be surprised if the $3B investment from Microsoft was primarily free courses and certifications to cultivate a market, as well some annotation work (I know that Amazon has been hiring quite a few people to do this kind of work).
A lot of IT work that gets done in India is low skill things that could be automated even before AI codegen tools. These jobs are particularly vulnerable to AI productivity gains .
The thesis here is that current gen tools should enable 2 people do the work of 10 and LLM models get paid the budget of 2-3 devs.
The outsourcing org comes out ahead with spending only 70% as before (salary of remaining devs will naturally increase)
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India is by far the largest market for this. 1yr free is for same reason any VC funded company discounts their product or gives it free first, or Microsoft famously rather have you use their software pirated than not at all.
This is only to get adoption, if your workers only know how to code with Claude or Codex then you are going to buy those tools as a company
Nobody is going back once you get them to change. OpenAI et al hope to capture 30% value of the IT outsourcing sector while making to cheaper by 30%. There is no free lunch.
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The number of CS “grads” are not a useful metric for India.
The industry shifted to hiring other engineering streams to any grads with aptitude to learn a long while back.
The vast majority of them don’t have any programming skills, don’t have critical thinking skills, are poor at communication.
They are unemployable. Don’t take it from me, NASSCOM says this too.
The degrees are largely from mills that charge up to $80k-$100k (med degrees go even higher) promising jobs but don’t teach much.
For the same reason legacy publishers sell expensive textbooks at 1/10 of the price in India, identical to the USA version save for a stamp that says you can't export them from India.
I'm a bit surprised that Trump isn't going after outsourcing in the same way he went after H-1Bs.
Not that I believe Trump actually cares about US jobs, let alone thinks strategically about the importance of a strong software sector, but you might expect him to at least do another mafia-style shakedown of the companies outsourcing jobs. Heck, you might think he'd even care about all the lost tax revenue, by having developer salaries going to India rather than staying here.
AI is absolutely replacing jobs though. I personally know multiple people whose companies have downsized departments or eliminated departments completely, offloading the work to fewer people using AI tools.
Here AI is more like a magic solution to stretch the employees you have. I don't know a single person who has been replaced by AI, but plenty of companies and government office hopes to be able to get more work done fast with AI. I doubt it will work.
No the OP is right, we had a whole department vanish: translators. Half laid off and half absorbed to other roles. I am waiting for this to backfire eventually, but even if it does, it will still be cheaper to handle the backfire than employing all those people.
At a big hospital system, nurses call patients with complex medical issues and help organize appointments and tests and whatnot. Previously, they had about 20 people who would transcribe recordings of the calls and then write up documentation for the medical records. Now AI transcribes and writes the report and sends it to the nurse to sign off / make edits.
I've been seeing AI-based call center software replacing jobs in droves. This has affected my company negatively as well, since a good chunk of our own users are call center employees.
The article seems to hinge on the core assumption that revenue is much less than spending:
> Those expenditures may be approaching $1 trillion for 2025, while AI revenue—which would be used to pay for the use of AI infrastructure to run the software—will not exceed $30 billion this year
While it's clear that the author is summing up the spending from the big players, it's not clear to me that their math is right for revenue. Yes, OpenAI, Anthropic, Thinking Machines, SSI, etc. have pretty limited direct revenue (including zero!).
But this comparison assumes no revenue growth for other top computing users. Some companies are certainly saving money on some tasks and increasing revenue, particularly in fields like customer support. See the confusing figure in section 5 of https://hai.stanford.edu/ai-index/2025-ai-index-report/econo... .
That chart is by number of respondents and not weighted by revenue. Like the MIT study, it would not be surprising that "just pipe this to an LLM" isn't enough for most fields or companies. But a few have likely made material improvements.
10% of respondents saying they've seen a >10% revenue gain could be substantial, if they're bigger firms with high leverage in computing.
Edit to add: the comparison also makes a classic "GDP vs market cap" style mistake. Capital expenditure has multiple years of useful life. Revenue is annual. You'd want to compare depreciation vs revenue.
There is certainly pressure to spend money on and use AI tools. I know multiple people at different companies whose managers brought up low AI utilization in their reviews. This is, of course, really stupid but here we are.
I'd say it's more "cost reduction" overall. And it makes sense to me. From my experience over the last few years, features are increasingly lower marginal ROI, and seem to take longer and longer to launch because the amount of coordination required keeps going up. Plus generally expected revenues in this economy are trending downward, so it only makes sense to reduce staffing and focus on only the highest priorities.
I'd say the biggest problem is AI complacency, something like: "in the future our revenues will be the same but won't need any people". So, in order to prepare for this future the obvious course of action to do some layoffs and just chill for a while. The problem is, we don't really know when this future will happen. If it is soon, maybe companies are making the right bet, if not it is more like a deliberate choice to slow down. That's fine if one or a few companies choose this path as competition will correct the error. However, if they essentially all move in unison competition won't fix the problem and we'll have a self-inflicted economic contraction for no reason.
The other factor is, will revenues really stay the same for companies once we have AGI / super intelligence? It seems value will not accrue to the companies that are in chill mode.
I think the article is missing two points: if the latest layoffs aren't related to AI, then this doesn't mean AI won't have or has an impact on head count.
And investment and experiments by definition include the risk of failing. In almost everything lies a survivorship bias and no one talks about the 100+ car makers that went into goldrush mode 100+ years ago. This is life. Netflix vs Blockbuster - already forgotten?
Also the "fail rate" - so what part is failing and why? What's with the 5%? If we have a look at exponential functions this might be a really good deal, if the 5% can account for the losses. After all, benefits compound over time.
I witnessed first hand in FAANG some quota hires and I believe that now that no one gets paid for contrived and artificial business advantages, we are back to a more merits based evaluation of workers.
But AI should not be written off as fancy something with no impact. That's the wrong take. Whether it will be a springboard to new jobs that compensate for losses or replacements - I am not yet sure, but tent to be in the former group. ML engineers take care of ML - something new that takes care of something new.
I think the company I work for has a pretty pragmatic approach for AI utilization. Don't use it to replace jobs, use it to make jobs more efficient (we call it an "enhancer"). IE we won't lay people off, at least not because of AI, we just may not hire as quickly as we did before LLMs, but still attaining similar scale. This goes for all departments, not just tech. We have very strict standards on what code gets accepted (no slop). Whether it's AI generated or not is irrelevant; even senior engineers can be guilty of slop after a long day. But we do have regular meetings to discuss our AI usage and to converge upon common patterns and rules to level everyone up.
That being said, I think we as a society are quickly reaching the point where there just doesn't exist enough jobs to keep everyone gainfully employed. There may be new jobs opening up but not ones that people in the middle or ends of their careers can quickly pick up on. I don't think this is a bad thing necessarily, just that when combined with the shitty safety net that the US has, it's a recipe for disaster. If even folks who are working full-time still need assistance for groceries, then we've already failed, and that's not even AIs fault.
I left IT for the time being, but I ask copilot.microsoft.com a question once in a while to see if we've got to AGI yet.
Today's question (I admit not so creative) was what's the market cap of TSLA.
Its answer was "Tesla Inc. (TSLA) currently has a market capitalization of approximately $429.52 billion USD. This figure is based on the latest trading price of $429.52 per share"
It allegedly used a web search to find this out, and it included a screenshot showing the market cap as $1.4B.
On the other hand, chatgpt.com prudently tells me to go look it up myself, because it doesn't have live data.
Slightly tangential to the article: a lot of the "AI layoffs" are really just old fashioned layoffs, but with exciting press releases meant to reassure investors.
AMZN for example overhired in various functions because it expected demand that never materialised.
Admitting that is bad for the share price, but writing some woo about "AI and agility" will convince at least some investors to keep the faith.
If AI really generates the value it claims to cutting jobs is short sighted. If existing human knowledge is commoditized, then we should be able to invest in generating new knowledge, and creating new kinds of products that were not even possible before.
And if AI makes workers more efficient, then businesses not actively hiring more employees are admitting that even with extra resources they have no strategy to grow their business. Like, if one person is effective as ten people, then a business should be able to grow quicker since their operating costs are effectively lower freeing up capital for growth.
So either their business is a dead end, the inefficiency is at the management layer, or AI isn’t actually making workers more efficient.
Matter of time until markets reckon with AI investment crowding out non-AI investment (cf. the massive oversubscription of Meta's latest bond offering). Must suck to be a small-cap firm squeezed by tariffs raising costs, unemployment lowering demand, and AI investment raising your own non-AI cost of borrowing.
AI isn't replacing jobs. AI spending isn't either. It's outsourcing and can be easily confirmed by cross-referencing H1B approval rates with layoffs.
If you've been outsourced, ask your representative to support the HIRE Act:
- Creates a 25% tax on outsourcing payments
- Creates a “Domestic Workforce Fund” for apprenticeships/workforce development.
- Prohibits companies from deducting outsourcing payments.
If we're hypothesizing, then the thin wrapper organizations should or would bear those same taxation and penalty costs when outsourcing and their prices would also be going up.
Over the last 20 years of tech, the giants have taken the smartest folks out there and put golden handcuffs on them. You could hire up all the smart folks and put them to work, or leave them out there and have them compete with you. With the launch of cloud providers and (expensive) dynamic scaling the problem only got worse. Think about hiring in the pandemic. Every one at home, with a stimulus check and nothing to do. Rather than a flurry of new software you got mass hiring.
But now we are in a capital intensive hardware cycle. Where in order to compete you need to have lots of $$$$ as well as software know how. It does not matter that there are smart people out there, without hefty backing they wont get very far.
I suspect that software is about to enter its "punk" era. We have software for small businesses that will help with accounting, HR, customer service, and cloud providers are starting to see some interesting competition. Much like the old punk poster showing you 3 chords and telling you to start a band it is entirely possible to find three friends and start a business that makes 1-10 mill a year with little effort and lower costs. The moment you stop thinking "unicorn" and start thinking "sustainable" the economics shift radically.
Not to mention that there's already a small market for software products that work just like existing products that were once good, only without all the AI getting in your way at every turn. You're just not going to be making huge enterprise sales with such a product (in 2025).
Funny to me how many of the replies to this comment are assuming you mean all these "punk" startups will be possible because of AI, when your actual comment says nothing of the sort.
The effort in those businesses was never coding, it was always connecting with and selling customers, understanding them, and supporting them as time went on. AI can help with some of that but generally the connections and network effects have outsized contributions in the smaller niches.
I think you're on to something, but interest rates probably have to come down a bit more for it to really have legs. We definitely need a response to enshittification though.
AI processing hardware deprecates (and depreciates) at a much faster rate than conventional CPUs, as much as 50% per year. Consider the billions being dumped into compute at that rate of depreciation and explain to me:
1. How will tangible assets generate profit net of near term capex requirements and interest on debt?
2. Why wouldn't payroll shrink as a result of the increased AI capabilities emerging from the capex spend?
3. If AI lives up to the hype & given recent news that public backstops are being requested, why shouldn't the US quasi-nationalize cash strapped players and distribute equity to every American?
4. As NVDA and AAPL local models and local compute eat into utility and base automation business, how do edge players maintain profitability without pricing capabilities well beyond the affordability of SMBs and individuals?
I doubt. Good artists are still killing it. I see it on social media all the time. Also, corporations rarely care about the art as part of business. I don't remember the last time a tech company (or finance, wholesale, manufacturing, etc.) hired an artist. It is part of the job description of some managers, maybe, but who cares about someone with mediocre Photoshop skills?
AI is just the scapegoat; otherwise we should see jobs like administrative assistant, legal, and medical replaced first. But I also think engineering is the worst field to get into. It's neither protected by a license like other white-collar jobs nor by a union like most blue-collar jobs. You end up overworked plus debt from school like white-collar workers but getting paid worse than blue-collar workers. And everyone's okay with that for some reason. Not a single organization is trying to change it. The government is happy with it, companies are obviously loving it, and on top of that, engineers are building the systems to replace them in a few years and they still think they are smart..
Software development is by nature a boom and bust industry, probably most like film. It’s about creative and isosyncratic contractors picking up projects when they are available.
What most people aspiring for a white collar career probably want is a job in IT - managing technology for business is much more stable than developing novel tech.
If the thought of needing to move or lose a job strikes you as horrible, this is not a likely career path for you.
Neither software development nor IT work is engineering work and shouldn't be considered one either. I am talking about engineering jobs, jobs that you went to school for 4-5 years in an engineering discipline, not a few weeks bootcamp or made-up program like computer science only to be called an engineer later, diluting the whole industry in the process. So yeah, software development might be boom and bust, engineering is not.
The first civil engineering degree was minted less than 200 years ago even though we've been building civil infrastructure works for millennia. There were plenty of mishaps along the way for that field too.
The creation of the first digital computer is still within living memory. The state of the software industry and its maturity is doing ok given its youth.
It’s not mandatory, if an employer chose not to care about it, you won’t find any legal issues otherwise in most engineering jobs, that’s not the case in say nursing or legal work. Unless there’s a regulation that requires any engineer should pass certain criteria as seen in other white collar jobs, then it won’t be considered.
I can't read the article but that won't stop me from commenting..
This year alone something like 400B was spent on investing in chips, datacenters, electricity buildouts. That's 400B that could have otherwise been invested in people.
While i don't doubt that people will find a few solid business cases for LLMs, i am on team-bubble. I don't think this investment will add 400B worth of value and I very much doubt that this 400B is any good for future growth or long-term aspirations of AGI. Investing 400B into people and (tech) manufacturing would be a solid long-term bet with benefits.
Bah, all of that is still employing people. Companies have completed almost $1T of stock buybacks this year. Since 2018, with the exception of 2020, that number has been between $800B and $1T every single year. And that number has been more than $500B since the 2008 recession. AI spend is bad but it’s not even close to how much stock buybacks have ruined the employee wages and employment prospects.
No but the point I was making was that AI investments at least generate jobs and allow money to flow to people, stock buybacks don’t even do that and are much bigger in magnitude.
Nobody said they don't, but these are very few highly payed jobs dwarfed by the number of lost jobs due to capital misallocation. That's the point of the OP which for some reason got lost in discussions of unrelated issues like outsourcing.
Besides, a lot of the AI investments go to Taiwan and other Asian countries where all of the AI hardware is made which makes non-AI hardware more expensive too - a huge cost on the economy. The recent Taiwanese factories in the US don't change that.
It’s mildly infuriating that we keep cutting corporate tax rates and using debt to finance public spending instead. That trillion dollars of buybacks would balance the budget with likely minimal impact on GDP (I mean clearly these companies don’t need the money).
Imagine if 10% of that money had been spent just training young people, or on a new cohort of PhDs. Imagine what benefits we would have reaped in a decade's time.
With $400B you should be able to do pretty much anything you set your mind on. Want to do to Mars, not a problem. End world hunger, $400B will do that in about ten years. You can do ANYTHING with $400B, yet OpenAI want's to sell erotic chats and show you ads?
I'm not saying that LLMs and the current AIs aren't useful, but they aren't worth even close to $400B. Some of the progress, especially in the medical field, is amazing, but the spending is completely out of proportion with the gains. It only works because right now people like Sam Altman has sold people with money on the idea and now they have to continue to peddle their sneak oil, hoping that the money won't dry up.
This does not reflect my reality. I have worked on half a dozen projects where we would have hired consultants to get the job done but have used coding agents to document, understand, migrate a project, create backend services, dashboards, and other things with budgets ranging from a few thousand euros to 200,000 euros. No consultants hired, nothing spent.
In our case - agentic loop optimization of kernels. Works like a dream - after all, you have a perfect python spec (validation), the kernel is small (under 10 kloc), and the entire thing is testable. The trick is to have enough back test data so that things like cache behavior are taken into account. Ended up with different kernel versions for batch-back-test vs real-time work - which was interesting. 5 years ago would have hired about 10 ppl for the job - now 2.
It was an innovation project, with an endowment of 200k. The task was to implement an llm based bot platform in a company with 700+ coworkers. After demoing MVPs, got 40k and access to experts I never needed to use. Deployed open source AWS solution, built customizations, landing pages, and data crawlers entirely solo using AI coding agents over ~3 months while working on other projects. Zero consultants, zero internal help. Would have easily burned the full 200k the traditional way.
So you still had to put in ~3 months of off and on again work, how many hours did it take you over those three months to configure everything yourself? Then figure about how much would you have had to budget out w/o the llm's help. Show me your math. Then of coarse you'd have to follow up w/ the company whether their "llm based bot platform" wasn't just a complete waste of their 200k in the first place for this to matter at all.
Do you think a developer's monthly salary is $70k? I think the winner is obvious, assuming his product is really worth something and he really had $200k budget for it.
Everytime automation replaced jobs the economies created by this replacement always created new jobs that replaced the previous ones. The USA has always been on the forefront of automating away jobs and it's unemployment rates show that new jobs were always created and that there was no long-term unemployment due to automation. AI won't be any different.
We shall see. Most automations didn't automate the "controller/intelligence" part - they automated the actual task's labor (even if it was clicking for hours on a computer screen). Someone still needed to make all the decisions at every decision point. AI is fundamentally different if it approaches what AI proponents want; it surpasses human intelligence and has "agency/agentic".
On a side note this is why I find proponents that state people with agency will thrive in the AI world puzzling -> isn't the whole point of "agentic AI" to have "agency"?
With no advantage left (e.g. strength, intelligence, agency, etc) even if new industries come about why not use the AI for those too? Unlike previous industries where new domains needed more "brains" to drive/direct it, we have AI now. AI isn't a tool; it can for example deploy and can make decisions for itself. That's what the obsession with "agentic" is all about - replacing agency which at the moment was the very general domain that you still needed humans for.
This strongly favors the economic means of production remaining that are still scarce (capitalism rewards the scarce, not the efficient). Land, capital, social connections/nepotism, etc. Logically people without these will be less economically and socially valued in general - I hope I'm wrong. The current productive class have the most to lose from AI.
AI IMO breaks meritocracy and skilled based work long term assuming they succeed. Even if not in the next decade, and not the current crop of companies pushing it I'm sure AI will eventually cause this outcome.
This article gets the phenomenon right but the causation wrong: it's not "AI spending vs. AI replacing jobs". both are happening simultaneously, and they're causally linked.
The spending-revenue gap is real. Hyperscalers are projected to spend $300-550B on AI infrastructure in 2025[1] while generative AI revenue won't exceed $30-40B [2]. Amazon's capex jumped from $48B in 2023 to $84B in 2024 to a projected $100B+ in 2025[3], that's capital intensity doubling from historical norms of 11-16% to over 22% [4].
But here's what the article misses: this isn't financial desperation. When Amazon's CEO announces 14,000 layoffs and explicitly states that AI will enable "fewer people doing some jobs"[5], he's revealing the strategic logic — show me the incentives and I'll show you the outcome. Companies aren't cutting jobs despite AI spending; they're cutting jobs because they know AI spending will pay off.
To be clear, the article treats the spending-revenue gap as evidence of irrationality. But infrastructure buildouts always precede revenue: railroads looked insane before they transformed commerce, electricity grids consumed massive capital before delivering returns, the internet required enormous infrastructure investment before creating trillion-dollar companies.
What's different now is companies are pulling the future forward. If we take this article at face value which I can appreciate is a BIG “if” then AI is already automating 25% of tasks and delivering 10-55% productivity gains[6] so they're not waiting for AI to replace jobs organically. They're cutting headcount now to fund the infrastructure that will make those cuts permanent.
More broadly, this is rational capital reallocation in a winner-take-all race. Companies that don't build AI infrastructure won't gradually decline, they'll lose competitive positioning entirely. That's why Meta is using off-balance-sheet financing for a $27B data center[7], why Oracle is borrowing $25B annually despite already carrying 450% debt-to-equity [8]. They're all-in because the alternative is obsolescence.
The real story isn't "spending causes cuts" it's that AI infrastructure commoditizes human expertise, the complement to compute infrastructure. Companies are trading labor costs for compute infrastructure because they've correctly identified compute as the new moat. The job cuts aren't the price of spending on AI; they're the business model shift that AI enables.
The article is right that we're not seeing mass AI job replacement yet. But the job cuts are happening in anticipation of replacement, not as an unfortunate side effect of spending. That's not desperation just business strategy.
This misses the point. The expenditure is financed by stock price increases driven by retail enthusiasm. Meta hasn't spent 1 dollar in AI that it hasn't made in increased mcap. The moment that dries up all the data centers are cancelled. You don't play with the food you eat.
You can already buy cheap but powerful old servers. But newer hardware tends to be more power efficient. So, depending on time horizon you consider, it might be cheaper to buy newer hardware.
Assuming that GPUs power efficiency will increase, the same will be true about them.
The one truly hopeful aspect of a bubble-burst scenario is that extra capacity always finds a use-case, and in this case practically any other use-case would be both less harmful and more real.
Before the AI craze, all the GPUs were being bought up by cryptocurrency miners, and I'm not sure that's better. Even as an AI skeptic I think AI is a better use of all this hardware than cryptocurrency.
Yes, like renewable energy infrastructure (which China does, and would be highly useful anyway in case generative AI does live up to its promise).
Even if generative AI lives up to its hype, with current US administration there's no way America is going to lead the race for long. There's just not enough energy available, when those in power oppose developing many of the energy projects that make most economical sense.
Because in any country with poor worker protections, the outcome is layoffs regardless.
AI succeeds? Layoffs of unneeded roles.
AI fails? Layoffs to cut expenditure to make up for the written-off expenditure.
In the UK, if AI makes a well-established employee redundant, the employee is entitled to redundancy pay. And if the company fucks up and overspends on chasing a ridiculous Macguffin they can't just fire people without making them formally redundant.
The damage that is going to be done in the USA if the AI bubble bursts is going to be generational.
It already is. The US is currently missing an entire generation of journeyman tech workers because they never got hired in the first place. It's like when Cash for Clunkers got rid of so many used vehicles that it caused market distortions for years.
I read in multiple somewhat off-beat sources lacking good info (in the sense "They did not back up their writings and don't enjoy an impeccable track record of such high regard that I will take their word for it", not in the sense "its known untrustworthy drivel") that the hiring rates in the US in particular for 'junior developers' is way, waaaaaaaaaaay down. As in, off a cliff.
I wonder if that's true; I'm not in the US myself so I can't exactly just go have a drink in a place with lots of devs to try to find out.
The reasons are somewhat obvious:
* World economy in general and the US in particular is a rollercoaster, with the current administration being apparently dead set on flip flopping on every decision it makes, and always making extreme decisions. That's not a good time to invest. Hiring juniors is investing.
* AI not necessarily replacing the jobs, but that's not actually relevant: AI has already torpedoed the general notion that 'if you have investor money you gotta spend just hire a bunch of folks; # of employees is the primary yardstick to check company size / success', whether AI works or not. If the boss tells a VP to 'use more AI to get a handle on hiring practices', then they're going to stop hiring juniors because it looks like you're outright refusing a direct order if you hire a bunch. Even if AI 'employees' are useless, you are strongly incentivized not to hire juniors in such an environment. Juniors both lost the job opportunities stemming from companies just hiring folks because they have enough cash to do it and no good idea on where to spend it, and the downside of looking like you aren't on the AI hypetrain, if you hire juniors.
* There's evidently been a rather massive push in particular during the previous administration to get folks from dead end jobs into IT, so there's now an overwhelming amount of junior devs, and many of them didn't naturally get drawn to the profession; they were told it's an easy way to get a steady job.
* Even though there's some downturn/uncertainty, seniors/mediors aren't being fired because companies still remember how expensive and difficult it was to (re)hire dev teams post COVID. But that just makes the market for juniors even worse and makes it harder to hold out hope. When everybody is getting fired, then once the economy is in better shape you stand a good chance. But that's not happening; those mediors and seniors are continuing to get job experience whilst the juniors aren't.
Those 4 combined: Sure, yeah, I can imagine your average junior dev's odds to get hired are at this point well into the single digits. But is that actually true?
Massive amounts of people with unsustainable lifestyle will stop consuming stuff. How will the whole capitalist economy continue to function with massive amounts of medium-high income people not having the same income anymore ?
"They [big companies] were already laying off lots of people and hoarding around 100 billion in cash. This has nothing to do with AI. The elites have been at that for some time for who knows what reason. If anything, they didn't start spending money until the AI boom.
You could say AI is destroying jobs for a different reason. The leaders of the companies believe in gold rushes more than a steady stream of investments into forming and growing actual businesses. They didn't or don't believe America is worth investing in. They're simply about extraction."
So, jobs are being replaced by AI spending (not by AI), and AI spending is increasing because of AI, which means AI is replacing the jobs. Did I get wrong?
I suppose the distinction is worth making, since if it was actual AI replacing jobs, i.e. AI that is capable enough, today, to do someone's job, or more likely to increase someone's productivity so that headcount can be reduced, then that would seem a permanent shift and is only going to ratchet up.
OTOH, if it is only dreams of AI, manifested as AI spending, or CEOs laying people off thinking that AI will soon (even if not today) be capable of backfilling them, then this may well backfire, and will be "reversed" if demand is less than forecasted and/or job-replacing AGI doesn't materialize, and all we get is productivity tools, useful mostly for a narrow band of jobs.
Incidentally, I think Karpathy might be right that there is pretty much only one job that seems it actually could be replaced by AI today, at least potentially, which is call center tech support, or customer support, staff, who are dealing with a narrow domain and just reading off a script.
Spending is happening only because, it promises to replace workers. And that possibility arises only because AI exists. Spending is only a means, not a cause.
Sure, but is the cause "AI" (here today, doing someone's job), or "promise of AI" (that may never materialize anytime soon, either in quantity or capability).
From the article: "We have been following the slow growth in revenues for generative AI over the last few years, and the revenues are neither big enough to support the number of layoffs attributed to AI, nor to justify the capital expenditures on AI cloud infrastructure. Those expenditures may be approaching $1 trillion for 2025, while AI revenue—which would be used to pay for the use of AI infrastructure to run the software—will not exceed $30 billion this year."
Are the numbers really that bad?
Google has been claiming that their cost per AI search query has dropped by over an order of magnitude.[1] They're presumably reaping the gains of not cranking up a really smart model on dumb questions.
I can assure you a lot of veteran devs in my company who had major impact were let ago because of off shoring to India and Poland. My employer is a very well known financial institution, think Blackrock, Bloomberg etc.
Public press paints picture of the firm laying off due to adoption of AI. Yet, I can assure you without doubt its not because of it but due to continued offshore.
I think we are at the brink of opening another large campus in India, not sure which city. Oh another thing is these full time position in NA were eliminated and replaced with employees from TCS.
My own boss is against it but its coming from higher ups. I have no idea what's driving them. We made billion in net revenues last year and we are actually part of the org that is in 'cash cow' category - upper management literally said this too in our town halls
Are visa restrictions deterring or promoting this offshoring?
Let them offshore if that’s what’s going to happen. And then let the stats show that American employment in certain sectors is tanking, and let the electorate decide what to do about that. Basically, I think this is a multi-round game rather than a one or two round game.
As a recently laid of senior engineer, to the extent that my job was replaced, it was replaced with offshore junior devs who'd already been working with the company for over year with a pretty rough level of productivity by man-hour, though maybe taking 3x the time to get things done is worth it if they're cheap enough. Which is to say I see my layoff as as cost cutting backed by a premise that there is no value in retaining senior level talent, to try and keep operating in the black, not because AI was materially producing a lot of benefits. (Because to the extent it was, I was the one reaping them compared to the offshore folks and less experienced onshore ones.)
In my experience, if you're working on a green-field project, you're working long hours, making very little visible progress, you have to write a lot of code, make important decisions.
All the while management is breathing down your neck and asking 'why isn't it ready yet'.
Once the thing is shipped, then all the important people come out of the woodwork, who were surely there all along, 'supporting' you from behind the scenes, there are photo ops and important people shaking hands. If they feel particularly charitable, then you might get a seat at the table. There's talk of spinning up a team around the product, and people fall over each other to get to lead it.
But the thing is, most likely they don't need your expertise any more, not really, once everything works, you don't really have a negotiating position as a dev. They get some cheap juniors to fix the bugs and add the missing feature niggles - hiring 3 juniors might not even be cheaper, the point is management does not have to depend on you, they can play their human resource games.
'But only I can fix that complex race condition, that popped up half a year after development' - well if it was good enough with the bug for people not to notice it for half a year, it's going to be good enough for another half, until the new devs can fix it.
This applies to ambitious feature requests as well - if the code's good enough that the contract was signed, the business requirement was met, they can just kick the can down the road until they can fix it.
> In my experience, if you're working on a green-field project, you're working long hours, making very little visible progress, you have to write a lot of code, make important decisions.
Funny, this is the complete opposite of my experience. Greenfield projects I've been a part of have had a ton of highly visible progress with _frequent_ updates to stakeholders basically from day 1. Same goes for complex additional features.
> 'But only I can fix that complex race condition, that popped up half a year after development' - well if it was good enough with the bug for people not to notice it for half a year, it's going to be good enough for another half, until the new devs can fix it.
From my time at AWS, and in light of the recent DynamoDB dns race condition bug, this is a line of thinking that is problematic.
There is so much complexity in the inner workings of any one of those services. Many of those services are now composed of many teams, each having turned over completely multiples of times.
Yes there are runbooks and knowledge passed down from each generation, to some extent. But when you hit some critical outage, edge case, etc., those people running the systems have such a different relationship to the system having simply maintained it vs. built it.
From a certain perspective, that line of thinking is only "problematic" if customers stop paying. In other words, the product only has to maintain a certain minimum quality threshold and doing any more is a waste of money. I don't necessarily agree with that myself but it is a common attitude.
You have an amazing amount of confidence that the new devs are going to fix subtle race conditions…
They’ll add a few sleep(5) calls to make them go away though..
A old Twitter thread: “what’s one thing you wish you didn’t know about cloud providers? Answer: eventual consistency means it just sleeps and retries all the way down.”
> You have an amazing amount of confidence that the new devs are going to fix subtle race conditions…
> They’ll add a few sleep(5) calls to make them go away though..
I don't think torginus's point is that the new devs will find the proper fixes for the code, more that such a hack might be good enough in the eyes of both the company's management and the company's users.
As much as it pains me to recognize this (as a fan of clean, elegant code) not every bit of software needs to be clean and elegant to achieve its intended purpose (which is, at least in the corporate software world being discussed here, to make money).
If you meet the needs of your software's users, you can make a lot of money for a lot of years selling a piece of crap held together with chewing gum and elastic bands (and many companies have).
Such "sleep(5)" is actually a milestone in a project, a milestone that marks the beginning of deterioration and the end of architectural changes. I've seen multiple pull requests with "sleep" and similar shortcuts, and worse, I've rewound coding agent context and changes because of such model suggestions. I'm responsible for informing management about the consequences of such shortcuts and why we have to take the correct, often more time-consuming and more expensive, approach to avoid project derailment in the long term. I believe that management picks employees. If they don't trust my judgment, then it's okay for me, but I don't feel obliged to be responsible for the consequences.
For a lot of startups the "sleep(5)" code isn't a milestone, it's in their MVP code with maybe a TODO comment to fix later.
I'm certainly not defending such code, just saying that its out there and in some very successful projects.
If the managers where you work understand the dangers of taking on such tech debt and are willing to put in the resources to avoid it, consider yourself lucky, because in my experience that's not at all universal, or even particularly common, though it does certainly exist at some places.
This markedly does not apply if the stack is esoteric enough and/or the code is bad enough.
I don't think aspiring to write awful backends in Elixir is the solution to this problem.
Like alcohol, technically it is a solution.
What dev to do then?
IMHO, there's never been a better time to build your own product and learn to sell it. The effort that AI implementation requires is clearly exponential to complexity of the organization.
You can build faster now that you ever have: I am building faster than I have in 25 years of engineering. You have more capable support for all the unfamiliar processes of building a business imaginable.
And almost everyone larger than you is finding it harder to achieve similar productivity gains from implementing AI, if not outright struggling with it. This is a golden moment and won't last long.
I can't agree with this more, and it's exactly both the position and the impetus of my personal action plan for the next several years to come.
Truly, AI levels the playing field, if you just have the inclination to look at it that way. It brings such potential to the right people. In my hands, a software developer who has been slinging code for food for 40+ years, I am a 'god' with a cheap monthly subscription to Claude Code. I can run several projects and keep track of every one of them and see progress like I've never had that chance to, in my entire lifetime. And yes, I still wield the stick, because I KNOW how to do this stuff. Claude really doesn't. Claude just gives me raw material, individual orchestral parts as it were, that I can put together with a conductor's baton.
My enterprise client? They get barebones slop. Enough to keep things alive but yet never be scalable and extendable. And they deserve that. They slaughtered our entire US based team and went overseas. They retain me to keep the wheels on while offshore wires up worthless, unpredictable AI agents to 'enhance' the product. I'm taking their money until I can break free sometime next year. They get the scraps now, and they will never know until karma brings them their bitter fruit.
My personal project. A really, really fun and fluid development momentum. Truly art and logic combined with Claude doing the grunt work for me. Absolutely a blast and it will have a user base, and the user base will really enjoy the results.
New partnerships. You can now make ANYONE you know, that much more viable, that much more tech savvy. As an individual, with your talents and our new little 'digital helpers', you, yourself can become the David to any Goliath you wish. You can help elevate ideas, small teams, and aspiring entrepreneurs and have a blast doing so.
Shed the notion that this moment has to be dark for you. It doesn't. It just takes seeing that maybe, just maybe, the boneheads that are trying to capitalize in these horrendous actions which include lying about AI, lying about the reasons they are laying off, etc. are bringing about their very demise in real time. Clueless as to what they are doing.
And those of us with the knowledge, ethics, high standards, discipline, and honor, are now armed with the very thing that can bring down those who created it to harm us.
It IS a golden moment!
It was never an issue to build something. The challenge is to sell your product to cover dev costs at least.
That too, is easier than ever.
It's just work, there's no secrets to it.
I already get multiple cold emails a month selling me some sort of software product or service that I don't need and that wouldn't work for me.
If a bunch of additional people start going and building MVPs, what keeps that from becoming even more of a flood, like what you get if you post a job application on LinkedIn nowdays?
I think sales is likely to get harder, not easier, soon.
And to your earlier post, I think the big question is: can individuals get more done on their own now building new things because of less organizational issues compared to incumbents, or because of less product complexity and scope? Is the organization the problem, or is the complexity of stuff built to try to service a thousand different previous sales deals and customers?
Similar trend at my company - we're looking to hire in India to reduce costs. The rumor is that we could replace 25% of our existing IT workforce without outsourced roles.
If anyone is worried about their job, it won't be AI that takes it - it will be outsourcing. The US offshores 300k jobs per year with a high percentage of them being IT (60-80% depending on source). It's really not that different to the offshoring of manufacturing decades ago. Why pay people onshore when you can pay someone in India half of that? Any job that doesn't require a physical presence or has legal pressures to keep it onshore will be at risk. It will likely get worse over time, just like manufacturing. I don't know what the future will look like if we continue outsourcing everything. It used to be that we outsource primary and secondary sector activies so that we could expand tertiary industries. What are we replacing the outsourced jobs with now?
Offshoring/outsourcing is nice on paper, but as management doesn’t have to deal with time zones, in reality it is much more chaos than expected. And how do they want to deal with fuckups? Thru Slack or Discord? :)
We had British SaaS supplier and all the time I have talked with Bangalore-based people. They had to work in night I suppose…
Also, Indian culture has a huge ‘overpromise, then try to cover it up’ issue at all levels. Outsourcers have really mastered it though.
Source: lived in India for a year.
Hard truths about outsourcing: you’re always dealing with a cultural, political, and legal gap.
Stuff that’s hella-illegal, that not even the remotest WFH citizen would ever try to pull, might look very tasty from another perspective. Economics that favour that cheap labour also means even marginal scams can seem wildly tempting on the other side.
A lot of tech has this culture in general: "fake it till you make it". I see this a lot in the startup culture as well.
I’ve had two experiences with off-shoring. The first time my former CTO brought in a near shore firm and they worked independently on a large project. There was no knowledge transfer or collaboration with the on shore devs. They built what was asked, it was over engineered and much was built of little value. We still have the software they wrote but it is a liability. The second time, I’m now in the CTO position, instead of having the nearshore people silo’d we work integrated. Everyone is on the same team, code reviews, pull requests, all mutually understood. It’s so much better. It all starts from the top and if you don’t have vision you’re doomed to fail.
I do wonder at times if tariffs and offshoring protection are necessary at a certain point. Forcing a labor constraint on an economy (within reason) can spur efficiency. Accepting high structural unemployment in the name of the free market seems irrational.
My company has been intentionally causing attrition in the US by moving to effectively a 996 style schedule. As people quit, their positions are moved to the India office. It is not an officially communicated policy. I have just surmised this based on private conversations with the executives and what is actually happening.
Actual Indians, as always. Humans are cheaper, and have the capacity for long term memory formation.
The way the outsourced companies are structured, the folks who actually know things spend all their time selling new customers/placating existing customers. The moment someone shows promise/that they are actually skilled, they get moved out of the actual dev teams.
It’s genius, in a way.
This is the same on a lot of larger staffing agencies that promise to have all the people you need and can either do entire projects for you, or get you developers, designers, QA, project managers etc on short notice.
They have a few very competent developers who are primarily in the secondary sales in my experience. First sales contact is between non-technical management and their front-line sales (usually very attractive women). In the second sales contact, technical staff from the potential client is involved and they bring along their real developers. But those are not the ones you'll get on the project. They'll give you interviews with the developers you can get, and they're coached for the interviews and sound fine. But then in reality they are people who can't touch type and develop purely by trial and error without forming a mental model.
If hiring locally wasn't such a mess, nobody would talk to them. At some point even a junior developer is better than not having a developer at all. I assume AI will change that and they'll get replaced first.
I would say it is more sinister than just a cost-benefit analysis and plain racism in hiring. Cheap talent exists in far more places than India but somehow it almost always is India. Not only that but I have seen the strangest LinkedIn profiles where people graduate from no-name Indian universities and get a big-corp job here in the West like it is nothing.
Even Japan has become pro-Indian on immigration for tech: https://eastasiaforum.org/2025/11/06/takaichis-japan-looks-t... Wtf...
It's not a racism thing, it's because India is in a fairly unique position: their population is so large, that (relatively speaking) the top 0.1% of Indians in any sector tend to outnumber the top 0.1% of (for example) Americans in that sector, plus if an Indian immigrates to America, a company can pay them less than an equivalent American employee (for various reasons).
So you basically can pay an Indian immigrant a junior dev salary, for significantly-better-than-junior-dev work. It's just stonks.
>”for significantly-better-than-junior-dev work.”
Not even close. We had two offshore contractors working with our team for about two years and they were consistently terrible. Despite this, some higher up pressed us to “hire” them so we conducted an interview. One of them said they had 8+ years of SQL query optimization experience and could not explain what a table scan was. The other claimed to have 5 years of C++ experience and thought a pointer was a url. I am not exaggerating.
Whereas our team’s college intern turned junior dev has consistently delivered increasingly valuable contributions and doesn’t lie to us.
Yes it is also racism, and tribalism - between Indian castes.
https://www.vice.com/en/article/silicon-valley-has-a-caste-d...
https://wol.iza.org/news/tech-giant-accused-of-hiring-bias-i...
etc..
Tons of anecdotes like this: https://www.reddit.com/r/recruitinghell/comments/1eblg0d/rea...
They bait-and-switch like hell. Once the original workers are out of the picture they squeeze the contract like a lemon. The managers involved won't re-hire and more often than not will even hide the mess (for their own sake). The old IBM playbook on steroids.
The Indian diaspora is huge and you have second and third generation folks in executive office all over. As a political force, south Asians are increasingly powerful as well in many states.
There’s a lot of opportunities for personal networks, nepotism and plain old corruption to work. (Who is going to figure out that somebody dropped a few gold coins to your sibling as a kickback?) There’s a much smaller network of people with relationships to Eastern European or other companies.
> There’s a much smaller network of people with relationships to Eastern European or other companies.
Unlike eastern Europe, India is geopolitically in a pretty good spot right now, having decent relations with most developed countries, and not engaged in any major wars with its neighbors. The last company I worked for outsourced a lot of work to Russia. At a certain time in 2022 they suddenly had to shift a lot of that work to... India!
Yup, India is geopolitically right in the middle - and enjoying it.
Absolutely. They are in the middle both physically and logically. Notice Trump’s big crackdown barely made a dent - mess with India, and Jamie Dimon and his peers are on the phone immediately… finance depends on the outsourcers onshore and offshore to function.
India’s long term positioning of neutrality and strategy with business, education and politics is bearing fruit.
No conspiracy theories are necessary here. The numbers speak for themselves.
Here is an article putting together data from GitHub about SW developers per country.
https://data-player.com/highest-number-of-software-developer...
When talking about outsourcing jobs from the U.S., you’re obviously gonna exclude the U.S. China is also not a factor. Neither are Western European countries or countries like Japan and S Korea because of relatively high salaries. Russia is out due to long standing geopolitical issues.
That basically leaves Brazil and Indonesia as the only alternatives to India in the top 10 and combined they don’t even have half the number of SW developers as India.
You need to then add Mexico, Vietnam, Turkey, Philippines and Poland to the above 3 to add up to the number of SW developers present in India.
Thats why the outsourcing industry is concentrated in India. You can setup 1 office in India and have access to as many SW developers (Indians are also very willing to migrate domestically, so an office in a single city is sufficient to cater to the entire domestic developer market) as you would if you setup 8 offices in & different countries across 4 continents.
Here you go, h1b hires still get paid American salaries so that throws the whole 'they get hired because they are cheap' argument out of the window: https://fortune.com/2025/09/22/india-government-responds-tru...
>70% is a pretty insane number that certainly speaks for itself.
Also, when you start giving a lot of tech jobs to people from one specific country, then the github developer numbers will naturally reflect that.
Grandparent was referring to outsourcing, not H-1B hiring.
I am talking about bias in hiring in general. I am responding that the bias in hiring towards this one country goes beyond that it is 'cheap'.
It is easy to make the 'cheap' argument when you talk about outsourcing but it no longer makes sense when you look at h1b numbers.
> hiring towards this one country goes beyond that it is 'cheap'.
No it doesn't, not materially anyway. Stats can be misleading if you don't pay attention. A lot of the big corps started hiring H1-B in large numbers long ago but since H1-Bs can't easily switch jobs and tend to suck up to higher-ups, soon their mid-management was occupied by H1-Bs.
Anybody who has tried to find a job in such an environment knows the drill - Indian managers hire only Indians and prefer H1-Bs to keep them docile. Salary isn't a consideration there, but it all starts with "cheap" and is sustained by ethnic loyalty and fear of the outsider.
In smaller companies where hiring is more natural, H1-Bs are still payed less and their inability to switch jobs makes them cheaper still.
That's a commonly made argument, but it's innumerate. Low h1b salaries lower local salaries. The reason you hire h1b is because they're cheap, and then the only locals you hire are the ones that will work at the price of h1bs.
Local salaries might even be slightly lower, because you get to hold h1bs prisoner (an added benefit.)
GCCs are expanding in Canada, Ireland, Poland, Czechia, and Costa Rica as well.
Indians are more visible, but salary expections have gotten extremely out of whack in the US, and extended WFH during COVID proved to most boards that companies can continue to operate when entire teams are communicating async.
If a large portion of interns and NCGs in the US are essentially expecting $45-70/hr salaries, it just isn't sustainable especially when factoring the growing skills deficit because universities failed CS students to a certain degree over the past 10 years by watering down programs in a short term bid to compete against bootcamps.
If we are paying Bay Area salaries, we expect performance comensurate to that salary. Basically, all companies are now starting to adopt the Netflix model of hiring in the US.
I was making $50/hour fresh out of college back in 2014. And I worked remotely. $45/hour today is not great given the cost of living.
FWIW, I get on the order of $40/hour as a senior with almost 10 years experience, and it allows me not to worry too much about spending (with a wife earning about a third of my salary and two kids). I think I could easily earn at least 50% more if I wanted to work for some rich but soul-crushing corp, but for obvious reasons I don't do that. I guess US cost of living is just insane. (I live in central Europe.)
> FWIW, I get on the order of $40/hour as a senior with almost 10 years experience, and it allows me not to worry too much about spending (with a wife earning about a third of my salary and two kids)
How much do you pay annually out of pocket for health insurance premiums and other healthcare expenses?
In the US that expense is very high, and is a major source of worry for working families.
I'm similar salary band, I pay 9% of my annual salary for mandatory medical insurance, but it's usually hard to get an appointment in reasonable time so you are going to pay extra 50-100€ for a visit to the same doctor, but in private clinic. And also vaccination and dental is not covered by that 9% payment.
For most white collar jobs like tech here in the US, your out-of-pocket as percentage is income doesn't play a role in how we decide salary bands.
For a family of four, the average health plan is around $10k out of pocket from the employee along with around $20k in employer costs [0]. Yet the median American SWE salary is $187k [1] versus $66k in Poland [2], $93k in Canada [3], and $111k in the UK [4]. Either way an American ends up earning significantly more after healthcare costs and insurance.
The issue is salary expectations at the lower performance band haven't kept up with what is expected at that salary band.
> In the US that expense is very high, and is a major source of worry for working families
When benchmarked against similar peer cities in Canada [5] or the UK [6], CoL is roughly at par yet salaries are significantly higher in the US, especially when comparing peer tech markets like SF [7] versus London [8].
This is the crux of the issue - demanding 100% WFH well past the end of COVID made it hard for us to justify domestic hiring when
1. Async was successfully proven to not impact business operation
2. A reverse brain drain of all nationalities in the US during COVID meant it was easier for employers to work with them to open a hub office or GCC abroad
3. A new grad is demanding salaries that simply don't make the economics of training and hiring new grads work. At $70k-$110k it does, but not beyond that.
4. Companies have now adopted the Netflix model - by cutting low performers, we can actually give higher pay bands to employees who actually have a business impact, as can be reflected in the rise in 75th percentile tech salaries.
[0] - https://www.healthsystemtracker.org/chart-collection/how-muc...
[1] - https://www.levels.fyi/t/software-engineer/locations/united-...
[2] - https://www.levels.fyi/t/software-engineer/locations/canada
[3] - https://www.levels.fyi/t/software-engineer/locations/canada
[4] - https://www.levels.fyi/t/software-engineer/locations/united-...
[5] - https://www.numbeo.com/cost-of-living/compare_countries_resu...
[6] - https://www.numbeo.com/cost-of-living/compare_countries_resu...
[7] - https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
> For most white collar jobs like tech here in the US, your out-of-pocket as percentage is income doesn't play a role in how we decide salary bands.
Most people here in the US don't have white collar jobs nor compensation of a software engineer. They work in retail or other blue and pink collar professions.
A Canadian retail worker has much more affordable access to healthcare than their US counterpart.
This conversation is limited to the tech industry.
A SWE isn't in competing for the same jobs as a cashier at London Drugs.
I think you make some solid points, but there are major tradeoffs some of the data is not totally convincing. If US workers are so much more highly paid than foreign workers, then we can reasonably expect the best workers to migrate to the US whenever possible. It's pretty easy for Canadians to cross the border. So one reason to hire American developers is for quality. The other is simply that these companies exist in the US, which means collaboration needs to be done in US time zones, which makes overseas workers far less efficient, not to mention the major negative impacts on worker morale. So there can be reasons to hire out of country, but the tradeoffs are significant even when well executed.
> If US workers are so much more highly paid than foreign workers, then we can reasonably expect the best workers to migrate to the US whenever possible
Not really.
No one wants to leave their families, and the upper tier of salaries in alternative geos are high enough to capture the higher talent tier because their salary expectations are based on their domestic condition.
On top of that, the US immigration system is severely backlogged. It can take decades for Chinese and Indian nationals to become green card holders, and we as employees increasingly expect foreign nationals to pay the filing costs - not us.
> other is simply that these companies exist in the US, which means collaboration needs to be done in US time zones, which makes overseas workers far less efficient and having major negative impacts on worker morale
Not anymore. WFH proved async work models can ensure business continuity.
On top of that, the bulk of layoffs during COVID were workers on work visas who were given the option to return to their home countries and open an office there.
This is what Google did in Hyderabad, Bangalore, and Warsaw, Databricks in Bangalore, Amazon in Canada and India, and Nvidia in Bangalore.
Furthermore, we as employers don't really sponsor VPs, Engineering Managers/Directors, Product Managers, and Staff/Principal Engineers on O-1 visas. Most are stuck on some form of EB1/2 or L1/2, and those who apply to O1s who aren't founders or extremely critical to the business are being sponsored but filing out-of-pocket.
It just isn't attractive to immigrate to America long term anymore as a white collar employee in most cases now aside from unicorn roles which employees then use to boomerang back to executive roles or demand US salaries in their home country.
Ideally we need to build a domestic talent pipeline, but universities failed severely by watering down curricula in an attempt to compete with bootcamps, which burnt a lot of employers disincentivizing them from hiring early career, and state and local jurisdictions in the US just don't give us the support or pipeline needed to build a competitive early career hiring pipeline.
For example, in cybersecurity, I can hire someone in Israel who has done offensive security work for a couple years in a military, police, internal security capacity or someone in India who participated in one of the dozens of Police Force, Army, or Home Affairs cybersecurity internship programs. Similar programs like Cyberpatriots and the Cyber Incentive Program (approx $100M) were mismanaged as was found in a 2023-25 investigation by the DHS OIG [0][1] and an entire generation of students of cybersecurity scholarships quit in 2016 when the Trump 1 admin cut funding for cybersecurity scholarship programs.
[0] - https://fedscoop.com/cisa-cyber-incentive-program-dhs-inspec...
[1] - https://www.oig.dhs.gov/sites/default/files/assets/2025-09/O...
> No one wants to leave their families, and the upper tier of salaries in alternative geos are high enough to capture the higher talent tier because their salary expectations are based on their domestic condition.
For 2x the salary young men have proven time and again they are willing to take the risk.
> On top of that, the US immigration system is severely backlogged. It can take decades for Chinese and Indian nationals to become green card holders, and we as employees increasingly expect foreign nationals to pay the filing costs - not us.
A challenge for sure. This and what you go on to describe could certainly shift some junior labor from H1B to remote contract. I would expect that shift to have a mostly net zero impact on other American exployment.
> > other is simply that these companies exist in the US, which means collaboration needs to be done in US time zones, which makes overseas workers far less efficient and having major negative impacts on worker morale
> Not anymore. WFH proved async work models can ensure business continuity.
Every non-US team I've worked with and everyone I know that works with offshore still have meetings. It would be incredibly dysfunctional to not have any collaborative time.
> Ideally we need to build a domestic talent pipeline, but universities failed severely by watering down curricula in an attempt to compete with bootcamps, which burnt a lot of employers disincentivizing them from hiring early career, and state and local jurisdictions in the US just don't give us the support or pipeline needed to build a competitive early career hiring pipeline.
Is that really what is happening? Because based on everything I can see, hiring standards are the highest they have ever been. As we get older, we have a bias towards underestimating the capabilities of younger generations, because we can see them making familiar mistakes in real-time.
> For 2x the salary young men have proven time and again they are willing to take the risk
First, sexist, and secondly in 2025 there's no guarantee that you would be able to live in the US long term on a work visa (but it's been this way since the mid-2010s), and if someone really feel the urge to immigrate to the West, then Australia, Canada, Netherlands, and Germany are all easier and (excluding Germany) Anglophone (yes, NL is de facto Anglophone now).
The US just isn't as attractive a location to immigrate to anymore for a large amount of people in white collar roles.
For the cream of the crop who primarily target American BigTech (GAYMAN) or HFTs like Citadel or Jane Street, in India the salary and ESPP grant can afford you household help, a nice condo, and make enough money that you can invest in building generational wealth or angel invest. It was a similar story for Chinese over the past 10-15 years as well.
For Europeans and Canadians, both are extremely turned off to America due to the Trump admin, and at portfolio companies we've seen a significant amount of requests from employees to shift away from the US as a result. Even Israelis increasingly don't target the US anymore because of perceptions and have begun choosing Germany, Czechia, or remaining in Israel.
> I would expect that shift to have a mostly net zero impact on American exployment
A lot of senior managers and leadership in tech companies are in the same boat with work visas as I mentioned before. All visas categories go through the same backlog for naturalization in the US - be you a manager, VC, factory worker, or SWE. Heck the creator of PyTorch is himself on one of these visas despite being employed at Meta.
> Every non-US team I've worked with and everyone I know that works with offshore still have meetings. It would be incredibly dysfunctional to not have any collaborative time
Absolutely, but everyone makes time for Zoom meetings and finds a way to make it work, or people like me will hire someone else who can get it done.
> Is that really what is happening
Yes in cybersecurity and a large portion of databases. I even explained why in other HN comments [0]
This is why most of our dealflow is now in Israel, Eastern Europe, and India. Look at recent exists like Wiz ans PingSafe.
Even recent cybersecurity companies that IPOed like Netskope and Rubrik have overwhelmingly hired in Israel or India and with leadership being Israeli or Indian either in origin or nationality.
[0] - https://news.ycombinator.com/item?id=45421720
> Absolutely, but everyone makes time for Zoom meetings and finds a way to make it work, or people like me will hire someone else who can get it done.
So we are in agreement that work cannot be fully async.
There are clearly some forces at play that are changing how immigration works in the short-term. I think where we differ is mostly this: our anecdotal experiences are radically different (I would say competency is increasing not decreasing as a general trend) and I would never bet against the momentum of the US long-term, nor do I believe that quality tends to remain steady or increase with offshoring. Maybe things are different in your niche. I appreciate being given a view into a different perspective!
> I was making $50/hour fresh out of college back in 2014. And I worked remotely.
Same for me, except out of high school, and a decade earlier.
That's the sordid tale of the industry. Outside of a handful of FAANG high flyers, pay, in real dollars, has been very steadily decreasing over many decades. But it took high inflation for us to notice.
Now we're in a difficult spot because we feel we need to make more to make up for the considerably higher cost of living, but there is no market willing to pay more — and never was.
I wouldn't be that pessimistic.
The market can bear to pay high salaries for the right talent.
If you can show me you have tangible development skills and can think about the product or feature you develop as a business (eg. Can you justify to me in financial terms the net benefit doing a refactor does versus keeping the status quo) you will be fine.
We aren't going to pay you $300k-$400k TC just to be a code monkey. We expect you to be able to help inform actual business decisions and not be a PITA when thinking about the core metrics that matter for a business - NARR, FCF, and COGS.
So, being a developer who is specialized in a business domain (eg. Being a fullstack developer but with a decade of experience working on Cloud Security products) makes it easier for hiring managers to decide whether or not to hire you. And as a former PM, those kinds of Engineers are the best to work with becuase they understand the pitfalls that exist in a subdomain and have opinions and the ability to justify them.
Those who can upskill or show the ability to upskill are also worth their weight in TC.
And finally, you will have to be located in Tier 1 tech hubs now (Bay Area, Seattle, Austin, NYC). The 5-7 year blip of satellite offices in RTP or Denver or Portland or being 100% WFH in a cabin in Montana is over. The roles at these kinds of offices are the ones that get offshored first.
> And finally, you will have to be located in Tier 1 tech hubs now
Exactly. Adjusted for cost of living, $300,000 in SF or NYC is about $170,000 where I lived back then, so ~$80/hr. Which is, after adjusted for inflation to that time... You guessed it: $50.94/hr!
And you're pointing at high quality talent with considerable experience, not some kid out of high school. Said kid out of high school like I was back then isn't going to find that much in today's market. As you point out, the market has tanked big time — and has been tanking for decades.
As before, we're only just now starting to notice how far behind we’ve fallen because of things recently becoming exceptionally more expensive.
> Adjusted for cost of living, $300,000 in SF or NYC is about $170,000 where I lived back then, so ~$80/hr
I've lived in SF over the same time period as well, and my CoL hasn't changed aside from rent - I've kept the same consistent savings rate - but even rent was largely manageable for me because of job opportunities and a mix of local and state rent control.
That said, I do think being Asian or Latiné means having different buying preferences (eg. the bulk of my shopping is at ethnic grocery stores and my "white people food" is primarily sourced from Costco or TJ).
Ofc, looking visibly ethnic also gives me the ethnic discount at most places I shop at.
> Said kid out of high school like I was back then isn't going to find that much in today's market. As you point out, the market has tanked big time — and has been tanking for decades
Oof, that is actually a good point. Sadly, you are right about that. I don't think hiring managers in the US would take a risk on hiring a HSer even if they have the right skills and domain experience.
-----------
That said, I am starting to come around to your argument.
Saddest part is in 2004, we also recognized then that we were making less than they were in the 90s. Peak software developer was a very long time ago.
London and Toronto have a similar CoL as the Bay Area and $45/hr is a mid-career tech salaries in both Greater London and GTA.
Edit: can't reply but every single white collar job provides an employer healthcare plan that is equally as competitive as the public healthcare plans in Canada and the UK.
And especially if you were being paid $50/hr as a new grad in 2014.
Edit 2:
> And I was in Michigan.
All the more reason I would have pushed back severely. It's easier to find talent at scale in London or GTA - metros there have a population larger than the entire state of MI, and with a breadth of options beyond UMich Ann-Arbor.
$45/hr is low for GTA. I was making about that in Toronto in 2017 with two years experience, one year vocational degree, and a bachelor's in a completely unrelated field.
> every single white collar job provides an employer healthcare plan that
The key word there is employer. Contractors often don't get health insurance, and contract jobs are not uncommon in the US.
London and Toronto give people healthcare. And I was in Michigan.
The vast majority of jobs in America give healthcare. The quality is vastly superior to London and Toronto, although we pay far more (and our medical professionals are upper middle class rather than middle / lower class). However this is a huge hidden portion of salary that most are not aware of, about $25k for a family of 4, which increases labor costs greatly.
On sheer metrics of access and quality, America kicks the shit out of Europe and Canada
I hope we continue getting the shit kicked out of us, if victory looks like medical bankrupcy, and insulin rationing.
So, uh... how come you die younger?
Opioid epidemic skews the stats.
The OP's point is why the wealthy in your country comes to the US for healthcare
Jeez--I was making $50/hr in 2004 in one of my first jobs after I finished my PhD and opted out of academia. That pay didn't go that far back then!
This is what upsets me about my career--that logistic pay curve. You initially grow fast and then it tops out and never gets better, but your costs keep rising, particularly as you have a family. I'm paying for one kid's college tuition right now, she has 1.5 years left, and will then enter a dubious job market. My son is 15, so if he goes to college, I won't be paying tuition for him until Fall 2028.
The problem is, I'm no longer a developer. I'm currently a nothing working on figuring out "something." I have a lot of skills and talents, but seemingly not many that will pay. I'm looking at any 2yr. training program that can get me certified to do something useful. It's so freaking bizarre to be sitting here with a degree in CS/Math, an MS in Computer Engineering from a very reputable university, and a doctorate in Information Management, also from a very reputable university, and looking at basically doing blue collar work! My nation has utterly failed me in every possible manner.
I should add that we are looking to move out of our fairly high-cost of living state for a possibly lower cost of living state, but there are complications to that plan, too. My wife doesn't really want to move our son out of the high school he is in. I'm saying that other imperatives need to be addressed before they become full-blown crises. I'm being taxed to death, and costs like insurance are rising fast.
> My nation has utterly failed me in every possible manner.
We've failed ourselves too, though. If I was some random person with endless money burning a hole in my pocket, what would I even do with a CS/Math/Computer engineer/Information manager? It is in no way clear how life is improved by working with such a person. Other industries put a lot of effort into marketing what function they serve. Said random person knows exactly when and why they'd want to hire a plumber, electrician, structural engineer, lawyer, accountant, physician, etc. But us...? We've rested on our laurels thinking Google, Microsoft, and Meta will forever want us, putting no effort into expanding our market.
Sorry for being dense. What are GCCs and NCGs?
I guess GCC night be Global Capability Center?
GCC - Global Capacity Center, basically instead of outsourcing to WITCH or EPAM, a company creates an entire office abroad that owns profit-loss, product roadmap, has executives present, and is a direct part of the company.
NCG - New College Grad
You ain't dense btw, it's a good question. Keep asking questions!
So GCC is basically a subsidiary in another country?
You can consider it a branch. It has all sorts of advantages like tax avoidance (you pay them the expenses - salaries and office cost - and zero profits to pay taxes on), you can fire them all if you want, especially if it is fairly small and replaceable. And you can sell the dream of promotion space in a large company, but they will almost never get that. And you cut the middleman and keep the money.
> sorts of advantages like tax avoidance (you pay them the expenses - salaries and office cost - and zero profits to pay taxes on)
Nope.
Subsidiaries need to pay domestic taxes which in a lot of cases are significantly higher than those in the US. That said, countries like Czechia, Poland, and India help by covering the cost of each employee per head depending on amount spent.
> you can fire them all if you want
Nope.
In my past experience, we need to follow domestic labor laws and they do not budge on hiring or firing in Czechia, Poland, Israel, or India. Ofc, the financial hit of hiring the wrong person is much lower there than in the US, and unlike the US those jurisdictions provide a single window or tribunal dedicated to disputes foreign investors may face.
Same with the UK and the film industry.
-----------
Basically, American jurisdictions became significantly non-responsive to services businesses after COVID and the 2020 election because white collar industries just didn't matter politically speaking (they represented a fraction of hiring and jobs in most competitive seats).
The same kinds of hand-holding support I mentioned above used to be provided by jurisdictions like NC, the Bay Area, NY, TX, etc, but local politicians don't care anymore and local and state governments are severely backlogged and attritted significant amount of personnel who understood business promotion.
Pretty much.
The big issue with outsourcing to WITCH or EPAM was you were essentially paying $30k-50k per head but getting the lowest tier of talent becuase those companies would pay around $5k-15k salaries to maximize their margins.
As such, companies decided to just open offices in India, Poland, Czechia, etc to poach talent in those countries because people are only productive if well remunerated, and remove the middle man out of it.
Ofc, the traditional Indian outsourcing companies like TCS [0] and HCL [1] have also begun pivoting away from Software outsourcing towards becoming end-to-end chip design companies, Infosys pivoting to becoming an end-to-end MedTech company [2], and Wipro becoming an aviation and defense manufacturer [3][4] because of a mix of Indian government subsidizes and Taiwanese, Japanese, and American FDI.
[0] - https://www.tataelectronics.com/semiconductor-foundry
[1] - https://www.reuters.com/world/india/india-approves-hcl-foxco...
[2] - https://www.infosys.com/services/engineering-services/insigh...
[3] - https://wiproaerospace.com/
[4] - https://www.wiproinfra.com/
> but salary expections have gotten extremely out of whack in the US,
You mean cost of living and inflation has devalued the dollar.
All Western countries are devaluing their currency. No other way to reduce the debt. Cutting benefits is political suicide. Taking every dollar from billionaires would knock a 1 year of debt off. The solution is inflation
> The solution is inflation
The response is inflation. It would only be a solution if it works, and of all the countries or empires that tried it in the past you'd be hard pressed to find one that succeeded at correcting their economy long term by debasing their own currency.
It's both.
The devaluation of the dollar relative to other currencies will eventually make it profitable for work to move to the US.
I think we're not seeing that yet because there's an imperfect coupling between asset price inflation, consumer price inflation, and exchange rates.
It may be a short term solution, on the right time scale I'd give it that.
The only way its a long term solution is if globalization is so fundamentally different from what other countries and empires have felt with that they can actually devalue at just the right rate to bring work back here.
Getting that rate right seems like a tiny needle to thread though, and that only works if this situation is different from when other currencies were devalued intentionally.
I think you might be confusing 'devaluation' with 'loss of spending power'. The dollar hasn't really lost value compared to other currencies. The thing that would do that would a loss of faith in the US to pay its debts, not the inability for the dollar to sustain a certain purchasing power.
> The dollar hasn't really lost value compared to other currencies
Yes it has. Euro costs 10% more in USD than one year ago
We have already eaten a ton of inflation, particularly in the first year or so when Biden was President. Trump printed trillions to forestall a collapse during covid. The wisdom of that move is lost on me. I would have preferred the collapse--we might be recovering by now instead of sitting on an even higher precipice awaiting the inevitable fall.
There is an interesting argument to be made that they have no choice once the problem passes a certain point.
The interplay between bond yields, the fed funds rate, and inflation can lead to weird situations. Right noe the Fed is having to lower rates because (a) job numbers are pretty bad and (b) the US debt is held in a surprising number of short term bonds and higher rates make the debt just rack up faster. They're also watching inflation continue to chug along higher than their 2% target though, a scenario they'd normally raise rates for.
I won't be surprised if we ultimately realize that, in the end, those in charge had way less control of the economy than they like to claim. I'm biased though, that's always been my view and it frustrates me that economics claims to be a field of science at all. It can be a very interesting and important historical analysis but it isn't predictive, and at the level of macroeconomics it can't realistically be isolated and tested.
> All Western countries are devaluing their currency. No other way to reduce the debt.
You increase the debt when you are devaluing your currency.
London has a similar CoL as San Francisco yet tech salaries are around 33%-50% what are offered in the Bay. Same with Toronto.
On top of that, both the British and Canadian governments give some degree of tax subsidy and regulatory support, though not to the degree that India, Israel, Poland, Czechia, or Romania provide.
Why should I pay Jeff from NCSU a US$175K TC in RTP when I can get Jane who chose to return to Toronto after living in the US working for large companies throughout her 20s?
A lot of techies on HN really underestimate the amount of reverse brain drain that happened during and after COVID. The COVID layoffs in early-mid 2020 primarily targeted those on some kind of work visa, and a number of those laid off were given the option to take a pay cut but also open a node in their home country.
Edit: can't reply so replying here
> I hear this, but the fact is a 70% pay cut in the Bay Area would simply not be workable at all
This is why we began opening offices in RTP, Denver, Chicago, NYC, etc in the 2017-22 period because we could pay closer to London or Toronto salaries back then in those offices and we had state level support.
All of that went to the wayside after COVID because a large portion of our workforce reverse braindrained, and someone in RTP demanding WFH and a Bay Area salary in a metro where CoL is comparable to Fresno and where we had to spend significant amounts of capital in commercial real estate to unlock tax benefits is ridiculous.
We are fine paying high salaries and TC, but it needs to be justified by actually high tier talent. Think the Netflix model.
I hear this, but the fact is a 70% pay cut in the Bay Area would simply not be workable at all. You don't just cut out Starbucks and Amazon junk.
Yeah I'm surprised to hear London has a similar cost of living to San Fransisco. I wouldn't expect someone working in tech in SFO today to be able to stay there at 33-50% of their current salary.
Are they investing tens of billions in new offices in those non-Indian countries?
My other comment: https://news.ycombinator.com/item?id=45867014
Yes. (Still in process of generating the list)
Poland [0][8]
Ireland [1][2]
Czechia [3][4]
Canada [5][6]
Turkiye [7]
The expansion of Indian offices is a result of the reverse brain drain that accelerated during the early COVID layoffs along with the EB1/2 backlogs - a number of Staff and above Engineers, EMs and above, and Sr PMs and above who were on work visas were either cut or given the option to relocate to India and start a hub office.
A similar trend happened in other countries, but India being so large means they get overshadowed.
[0] - https://www.gov.pl/web/primeminister/google-invests-billions...
[1] - https://www.amd.com/en/newsroom/press-releases/2023-6-20-amd...
[2] - https://enterprise.gov.ie/en/news-and-events/department-news...
[3] - https://www.itpro.com/business/cato-networks-announces-major...
[4] - https://www.onsemi.com/company/news-media/press-announcement...
[5] - https://www.reuters.com/business/lyft-open-toronto-tech-hub-...
[6] - https://www.connectcre.ca/stories/amazon-plans-toronto-offic...
[7] - https://www.reuters.com/world/middle-east/uber-invest-200-ml...
[8] - https://news.microsoft.com/pl-pl/2025/02/17/microsoft-announ...
[0] no concrete number, and wording implies intent in the order of 1 billion total
[1] only $135 Million
[2] only 1,300 new employees (over 6,000 current); meanwhile "Apple India leases [...] likely to be one of the largest single-tenant office leases in [Bengaluru]" https://timesofindia.indiatimes.com/technology/tech-news/app...
[3] Never even heard of Cato Networks, and no figures. So irrelevant.
[4] onsemi manufacturing $2bn, not relevant as this is manufacturing numbers (Apple India is expanding multiple times that)
[5] No numbers, 2,934 employees. Mentions increment 20% of local market and an acquisition. Not relevant.
[6] Amazon plans 8,500 employees in the two [Canadian] cities. Meanwhile "Amazon to invest $233M to strengthen India operations network" https://www.aboutamazon.in/news/operations/amazon-to-invest-... (OTOH: they are laying off 800-1000 in India, out of over 15,000 desk employees just in Hyderabad)
[7] Uber to invest $200 mln in Turkey. Peanuts compared to the billions in my links.
From your submissions it seems like you are Indian or something.
A friend, senior engineer, was laid off sometime ago. He was replaced with an offshore junior dev. The strange thing was that he was located offshore as well. What actually happened was that his company had to pay 50-60% of US salaries and RSUs etc to hire and retain talent at these offshore centers. They decided that was too costly and hiring an outsourcing outfit to pay 10% of US salaries instead.
With AI even dumb people feel smart - thanks to the overconfident answers, I am expecting this to be race to the bottom. Even the highly skilled offshore employee is not safe. Middle managers crunching numbers and looking at the bottom line might be convinced that if AI + less experienced but cheaper "human in the loop" can produce "similar" result at 10-20% of the original cost then that is worth it. I am personally dealing with such middle managers nowadays day in and day out. They seem blown away by Copilot demos and keep pushing "savings" and don't seem to understand AI hallucinations at all.
Hacker News doesn't like to hear it, but remote work is a big part of this. All that effort convincing management you're just as effective working remotely was also a collective sales pitch to outsource your role.
Outsourcing comes and goes in waves. Good talent in India and the Philippines tend to work for FAANG companies, often at very comparable salaries to the west.
The remainder of the talent tends to struggle with some of the outsourced work, but with AI they can now give a semblance of competence.
In the UK a major retailer, Mark and Spencer got hacked after outsourcing work to India. They couldn't fulfill orders online for months, and they are now reducing the amount of work they outsource to India.
We will see something similar happen to other companies in a year or two, but until then we just have to tighten our belts and hope we don't get layed off before then.
its kind of hard to imagine that FAANG employees in india and philippines get paid as much as the west when London is a 30-50% cut from the Bay Area.
Just perusing on google for roles at google in hyderabad, I think its significantly lower than the US.
They do though. My company hires in India and has had a hard time retaining talent there because anyone with mediocre talent can get western salaries by switching to larger companies than our own.
We've lost a decent number of engineers to Google, Facebook, and Amazon in India.
My company wants to pay roughly $50k USD in India per dev and that's just not enough. They've tried to compete by making nicer facilities and better in office benefits (like a cafeteria) but it's just not enough.
FAANG may offer those devs more than your company will in India but I'd be very surprised if they offer them similar compensation to FAANG devs in the West and specifically the US.
Talent eventually get paid their value. Doesn't matter where they live. If you have a brain, you rank up. Quickly.
> Outsourcing comes and goes in waves. Good talent in India and the Philippines tend to work for FAANG companies, often at very comparable salaries to the west.
In those locations?
Based on sheer CS grad numbers why wouldn't companies just shift their r& operations there then?
> Based on sheer CS grad numbers why wouldn't companies just shift their r& operations there then?
There are lots of CS grads, yes. But most colleges out there are mostly degree mills, and this carries on to the workplace, where your average software engineer or engineering manager has very little understanding of what they’re actually doing (this[1] article was posted on HN, which will tell you the quality of engineering in India).
For anything slightly complicated, companies seem to be only interested in hiring from the best colleges and pay out of their nose in the process. A friend of a friend does some hardware work at a FAANG, and gets paid at almost that level.
[1] https://eaton-works.com/2025/10/28/tata-motors-hack/
Conversation about outsourcing aside, it isn’t fair to pick one example and generalize to say an entire country’s talent pool is poor.
The US has the best engineering talent pool in the world and you can find dozens of examples at major companies as bad (or worse) than the one you linked.
The FAANG I work for is trying to do just that. But while new grads are indeed a dime a dozen, you can't staff an R&D with only new grads, and finding and retaining skilled seniors is so tough that it has resorted to offering US-based Indians packages with US level comp to entice them to move back for a few years to bootstrap teams.
> Good talent in India and the Philippines tend to work for FAANG companies, often at very comparable salaries to the west.
I've never heard of typical senior engineers getting paid $400k/yr in those locations.
Outside the US, I've only heard of Zurich being the only comparable location.
> In the UK a major retailer, Mark and Spencer got hacked after outsourcing work to India.
Does sound more like correllation than causation. Was there evidence that the Indian devs made the mistakes that led to the hack or was it just the good old 'let's fall back on racism to avoid blame' by management? I still remember the articles where Boeing tried to peg the 737 MAX crashes on Indian engineers who worked for $10 an hour.
Its more about social engineering (this was the case for the m&s hack), if you outsource your work, you have less visibility over the people that work for you and it becomes more of a black box. This leads to worse employee awareness in general.
> Good talent in India and the Philippines tend to work for FAANG companies, often at very comparable salaries to the west.
As other commenters have pointed out, this is simply bullshit. Good talent in India and the Philippines earn nowhere near US dev salaries. Unless by "very comparable" you mean 1/3 - 1/2.
Jaguar/ Rang Rover is owned by Tata, and they created a massive $2B hole in the UK enconomy
Yeah. One of the most ridiculous things in my entire life of 40 years was seeing 90% of my fellow SW industry workers using the 2 or so years during/after COVID where we had more power than we’ve ever had to advocate hard for making ourselves much more easy to replace by insisting on remote work, and insisting on reducing our productivity (even if not actually, at least in the eyes of the employers) so we couldn’t justify our higher salaries anymore.
Just outright insane.
Remote work benefits workers too, though:
1. It enables them to live in lower cost of living cities. This makes them more competitive relative to outsourcing because a lower wage in a cheaper city goes farther.
2. It opens up the job pool. If you work remote, you can work at any company that takes remote workers regardless of where you live.
3. It reduces the cost of switching jobs. Many people are stuck in jobs they don't want because there are few other local opportunities and switching jobs means uprooting and moving. For a single 20-something in an apartment, that doesn't sound so bad. But once you have a partner with their own career, kids with meaningful friendships, a mortgage, etc. then moving can be extremely disruptive.
In general, more job flexibility increases the efficiency of the job market for employees.
1. The cheapest American city is maybe half thr cost of the most expensive. Meanwhile in the most expensive Indian city, one could live like a king at 1/3 the cost of the cheapest American city with far more culture and things to do. And if you were willing to move to the cheapest Indian cities you could halve that again.
2. Correct. Given that the majority of SW jobs, especially the highest paying ones, were located in the U.S. this is a net benefit to anyone living outside the U.S. even before you take cost into consideration. More American jobs opened up to a Londoner than global jobs opened up to someone living in SF.
3. Efficiency approximately = lower costs. In this case costs = developer salaries.
So you’re right. We got more efficient. We reduced the average cost of developer salaries per job. Since very few people are willing to take a pay cut this means jobs are moving/will move to places where people are willing to work for less.
Just a note on point 1:
As someone who is Indian and frequently visits the sub continent (writing this from a suburb in Delhi) I can categorically tell you that no one actively wants to live in the cheapest Indian cities (just left my family’s home city which falls into this bracket).
I’m not sure if you’ve travelled much around the sub continent but I’d say you’re quite badly romanticising it. Yes we have our own culture which is different to that of the USA but, as with all things, there are A Lot of aspects of the culture here which are not admirable.
While what you write is correct, the parent speaks about the most expensive tier of Indian cities, which are quite a bit nicer.
Well, no, not really. Top tier Indian cities like Bengaluru, Delhi and Mumbai are expensive and horribly dysfunctional when it comes to pollution, traffic, hygiene, dealing with government bureaucracy, etc. Having money insulates you from some but by no means all of this.
The parent literally mentions ‘the cheapest Indian cities’.
As others have said, even the richest cities have a swathe of issues which simply do not exist in the west (reasons for which are another discussion).
*looks at air pollution chart which is literally at 359 right this second (01:38)*
Have you ever travelled in Mumbai city trains during peak hour, I can assure you it's not nice. Look up videos on Youtube.
And are just as expensive as most nice places in the US
> I can categorically tell you that no one actively wants to live in the cheapest Indian cities
Sorry to burst your bubble but, I love living in my T3 city I was born in.
Don't talk for 1.4 billion people.
Thanks.
> Don't talk for 1.4 billion people.
The data for Indians moving out of India does the talking.
I'm not super familiar with either country, but I feel like that's not really true
this is comparing Seattle and Mumbai
https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
Real estate is about 2x-1x the price (I bet the cheap stuff is much worse than in the US though).
Cars and more expensive big purchases are cheaper in the US. And don't forget, the US has absolutely first-class-bar-none access to financial services, with abundant cheap loans, so you can support a much nicer lifestyle on the same income.
> More American jobs opened up to a Londoner than global jobs opened up to someone living in SF.
As someone living in EU and working (and job hunting) for American companies for the last N years I just have never seen it happen. American companies were opening subsidiaries in Europe long before COVID - they were just making everyone go to office there. Surge of remote work didn't seem to bring new American jobs to Europe as far as I could see - if anyone was hiring remotely, it were the same companies that already were hiring for in-office jobs before. Meanwhile, most remote jobs by American companies seem to be open for American residents only.
Thing is, for most locations, you still need to establish a legal presense to hire there, and that is enough of bureacratic burden for most companies to expand their geography very sparingly
Efficiency does not necessarily mean lower costs. More efficient workers could mean more valuable workers, and thus something employers are willing to pay more for in a competitive labor market.
>In general, more job flexibility increases the efficiency of the job market for employees.
It increases the efficiency of the market as a whole, but that's not the same as saying that first world software engineers (already highly paid and previously protected from foreign competition) would be better off.
Claims 1 would be difficult to back with evidence.
Some may accept a significantly lower pay (to go such a long way), but many wouldn't.
Overall my observation is that costs of living doesn't proportionally follow compensation. The far stretched example is how offshore staff often live in countries with costs of living at about a fifth, earning a third of their counterparts in the U.S or other top paying countries
Of course for skilled jobs perfectly doable remote such as software engineers.
I may be biased by the fact it also makes sense, a worker understands the value provided to the business is more or less equal, and since we live in a market society, why wouldn't it be expected to earn the same. In effect we don't earn the same no matter the location, but it is somewhere between that and aligned to location comp.
I find that some tech workers don't understand economics that well. In general more efficiency for an industry means less wages per unit of output worked across a whole industry. The benefit of "efficiency" usually accrues to customers of a service, not providers.
Efficiency benefits society at large, at the expense of the people being made more efficient. This is just capitalism and the result of price (and also sometimes societal respect) being a function of scarcity of a product/skill.
There's a reason construction unions, doctor's associations, and the like exist - to promote members interests (i.e. predominately money). If you can cartel an industry to produce lower efficiencies; assuming that a disruptor can't break into your market and ruin your party your members will accrue higher salaries and usually given our system more respect from peers in society. Locally I'm hearing "get a trade"; and when I say I'm a SWE people sneer - the respect for the profession IMO due to "efficiency/AI" has crashed over the last decade.
> when I say I'm a SWE people sneer - the respect for the profession IMO due to "efficiency/AI" has crashed over the last decade.
Tbf, a lot of SWEs sneered at other professions getting automated by AI - even on HN.
There isn't much sympathy to be given to SWEs and techies simply because we are paid significantly higher than other white collar roles with comparable or worse working hours like accounting, marketing, other engineering disciplines, dentistry, nursing, and even various subfields of medicine like primary care physicians.
A lot of techies who are complaining on HN need to realize that in reality they are the elite even though they don't think they are.
Why does Jeff in Cary NC deserve a $200K TC working 40 hours and remote first and just a BS in CS when a CPA at PwC makes $120K TC with added debt from a masters in accounting, a Management Consultant at BCG makes $175K TC with added MBA debt, an Biomedical Engineer at Biogen earning around $120K TC with added debt from bio undergrad and grad school, a journalist working for a local newspaper earning $30k-50k with debt from journalism school, and a teacher earns $50K with debt from getting an education credential on top of a bachelors?
> It enables them to live in lower cost of living cities.
…
> switching jobs means uprooting and moving. … moving can be extremely disruptive.
This one thing has two aspects that you claim is both a benefit and a drawback simultaneously.
Everything is trade-offs.
I started a company during COVID and we hired: one engineer in SF, one in NY, three in different areas of Israel, plus co-Founders in Boston and Baltimore. There’s no way we could have hired all this specialized talent in any one city at a price we could afford. I also missed the in-person dynamics, but I can’t imagine how you’d build this kind of team without remote work.
Startups are a different deal. Everyone knows everyone, people are hired for their specific talents, management barely exists, there are no executive types disconnected from the reality in the lower levels of the company, no turf wars of middle management, etc. (This is why I prefer working for startups.)
Big corporations are the opposite. Doing something that looks good locally / helps a quarterly report but works to the detriment of the company as a whole is often par of the course :(
There’s quite a lot of arrogance about foreigners just not being good enough. Turns out smart people are everywhere.
Theres an equal amount of experience showing that the claims that cheap outsourced workers produce less output of lesser quality is true.
Neither generalization works for ALL cases but hand wavey claims of some ism is small comfort to those of us who've seen the results more than once.
And I've worked with excellent offshored workers as well, but that doesn't make claims to the contrary invalid.
Sure, but many companies outsourcing aren't looking for the best, they are looking for the cheapest, and surprise-surprise the cheapest are not the best. Some of them are goddamn awful - close to zero value, but upper management typically never hears about that and just thinks they are saving money because they are cheap.
There is also a big difference in mindset between an employee hoping to advance their career at a company, trying to become a SME, pushing initiatives, incentivized by stock grants, actually caring about customers, etc, and a vendor employee - even a good one - to who this is just a temporary gig, and has no vested interest in the quality of the codebase or building value for the company.
If upper management think that they don't deserve to be upper management.
In many companies there is little flow of real information from the bottom up. Upper management only hears what everyone understands they want to hear.
If the top down message is "this is the direction, make it work", and people further down in the hierarchy understand that the boss doesn't want to hear that his plan (e.g. hire the cheapest to save money) isn't working, then he is not going to hear it.
Companies don't even care, honestly. Some have uptime requirements that they get fined over if things go sideways, but besides that, they don't even care.
> There’s quite a lot of arrogance
that covers more bases
It was going to happen anyways. I was working remote 2-3 days a week before 2020 hit and that was mainly due to how bad my commute was time-wise. It was exhausting. But it's because the team I was working with was all in other cities and countries and so I was driving to an office location just to badge in. I barely even talked to anyone there. It became a terrible job for that reason alone. Much of what made my career was developing professional contacts and colleagues and Covid took all that away from me to the point that it killed my career. Now a lot of us are in the same situation and I'm here to tell you, I think this is it--it's never coming back this time. You can hope it does, but hope is not a strategy.
The people I worked with were pretty distributed before COVID--partially because functions (and geo regions) were distributed anyway--and partly for other reasons. When COVID hit there was basically very little effort to co-locate most teams. Some companies did try to pull people back but in a lot of cases, it was a matter of RTO but that was a good way to do a mass layoff. Many companies didn't want to do that.
I did (and sometimes still do) attend professional events but the level of interpersonal-contact pre-COVID was gone long before I semi-retired.
"Foreman says, 'These jobs are going, boys, and they ain't coming back'"
-Bruce Springsteen (1984)
More insane than specifically developing AIs to write software, creating competition from machines as well? As a group we’re not exactly rational.
This argument would make a lot more sense if you replaced remote work with unions. All that power and opportunity and they squandered it thinking their bosses and management was on their side.
Go ahead, downvote. As if working in the office would have magically protected you these layoffs.
Will the union advocate against H1B and offshoring?
They have been for decades: https://aflcio.org/about/leadership/statements/reform-h-1b-a...
That article is from 2003. What about this one on the front page values?
https://aflcio.org/issues/immigration
> The only way to stop the race to the bottom in wages and standards is for working people of all races, religions and immigration status to stand together
> Find resources to help union members know their rights and ensure they are prepared to defend themselves and the immigrant members of their families and communities in the event of workplace or community raids
What about this one that explicitly advocates for non-Americans?
https://aflcio.org/issues/global-worker-rights
> The AFL-CIO believes that confronting these challenges requires building power for people around the world.
The whole site is just college leftist activism. This isn’t about bettering my job and career
You were being off shored before remote work was ever a thing lol.
Imagine if there was a push to create a professional organization to handle qualification, certifications etc. Like there is for doctors, dentist, accountants and other fields
Only in America is this kind of anti-labor sentiment masquerading as "if you knew what was good for you now look what happened", as if businesses were so stupid as to be fooled by "if we don't make it apparent, they won't notice" and somehow this would shield programming from off-shoring. The actual reality is that post-WW2 exceptionalism in literacy ended; the developing world caught up. The entire premise of American labor exceptionalism was built on this faulty assumption. And rather than reconfigure your negotiation as labor, your first thought is how you can get back in the good graces of the 'big boss'.
What does renegotiating labor in the face of increased labor supply mean other than just "accept a worse deal"?
Unionization
I spent some time consulting over the last few years. So many companies are laying off their US engineering teams and replacing them with offshore teams. There used to be this notion that offshore meant lower quality but it doesn't seem like that as much these days. I've worked with some Ukrainian teams for example. They're 20% the price of Americans, produce the same quality, work harder, and speak great English. It seems like a no-brainer to go offshore.
There is an eternal cycle between uncomfortable and productive and comfortable and lazy.
15-20 years ago SWE work was brutal and paid OKish, but not great if you calculated the hourly.
Then the era of free VC money came, culminating in the pandemic boom, where people were crash coursing JavaScript to land a remote job doing 4 hours of work a week for $170k.
The pendulum is now swinging in the other direction.
Before the first dotcom era, software jobs paid like most other professional office jobs. Decent money but nothing really remarkable.
With the dotcom boom and VC money, that changed. I doubled my salary going to a startup in 1998. I was not a better developer all of a sudden, it was just that startups had piles of money and investors demanding that they spend it.
15-20 years ago software development was still very well paid compared to 30 years ago. And then the really insane FAANG money started flowing.
So much fantasy landing in the comments here.
I worked in software 15-20 years ago. The work was not "brutal". I worked hard, but mostly because I enjoyed the work. I lived in a major American city and my pay was essentially the highest pay you could get outside of professions requiring professional degrees like doctor or lawyer, or some high finance positions. And even then, I made more than some doctors in lower-tier specialties.
Offshoring didn't start in Covid and it still has the issues of time zone, culture, etc.
You're not wrong in that companies are looking to hire in cheaper geographies but I think the remote aspect is just a small part of it. Another part is that SV comp has shot through the roof because RSUs. There are also arguably more and better people available in the cheaper geographies.
But it's not a zero sum game and there are still a lot of tech jobs in North America. AI hasn't reduced that total number of jobs.
No one likes to hear it because it's not a part of it lol. Paying fair market wages is different than trying to exploit differences in vastly different standards of living between very very different economies.
Talented workers get talented pay -- a fact many company's and execs don't like.
It has very little to do with their literal position on earth in relation to a company's real estate foot print.
Workers need to be more intelligent and what was that word you used in your comment... "collective."
The U.S. managerial class has been GORGING off worker's labor for decades and workers are about to have nothing to show for it.
As someone who over the past couple of years was responsible for some of these hiring decisions, it absolutely is a part of it ... lol.
I've worked with absolutely fantastic developers in Argentina, Poland, Romania and Ukraine. You're right, talented workers get talented pay, but talented pay in Romania is a lot less than talented pay in San Francisco. Teams are used to working entirely remotely now, videoconferencing software is great, and teams mostly align to US timezones (not entirely, but for example Eastern European workers shifted their day a few hours later so we get at least 4-5 hours overlap every day).
I think companies are a lot smarter about outsourcing now than they were 15-20 years ago and focus more on developer quality, but I've absolutely seen that a company will be much happier to hire 2 excellent senior devs from Poland for what you could get for 1 junior college hire in a high cost of living area in the US.
I think you're contradicting yourself or getting some wires crossed.
>You're right, talented workers get talented pay, but talented pay in Romania is a lot less than talented pay in San Francisco.
But this is due to again, vastly different standards of living in different economies. Geo-based pay ranges have always been a thing, but I think it's a bit reasonable to draw the line here.
So it's not:
>it absolutely is a part of it ... lol.
Because you're not hiring people from elsewhere because of "well I don't need people HERE anymore." The calculus is the same it ever was, even before COVID.
Companies were already out-sourcing before great video conferencing software or an understanding of how to work with remote teams.
It's an exploitation of different economies, at the expense of the American working class.
It's the same thing, just under a shiny new label designed to absolve the managerial class from said exploitation.
I don’t think anyone is arguing that the basic idea of offshoring was invented after the COVID pandemic… But rather that workplaces and workforces geared towards remote working has made it more feasible and accelerated the process
>But rather that workplaces and workforces geared towards remote working has made it more feasible and accelerated the process
By what metrics?
Is it really hard to understand that the infrastructure for remote work, which I think everyone would agree got a major upgrade during the pandemic, would also make it much easier for companies to outsource software dev work?
Pre-2015 or so, yes, of course there was outsourcing, but it was honestly a major PITA in most cases. Most communication was done in conference calls, very little group video communication, lots of async chats, etc.. Any type of work where you needed a fairly frequent black-and-forth with various team members was rarely outsourced - the type of work that was outsourced was the type that was more likely to have static requirements.
But now, though, there is basically no difference working with a colleague who's working from home in the same city vs. working from home thousands of miles away (as long as there is good timezones overlap). And that is a change that only happened around the beginning of the pandemic, and I've personally seen companies much more willing to outsource because of it, and they're outsourcing a much wider type of work (e.g. brand new dev work that is frequently updated based on usage metrics) than they would in the past.
>Is it really hard to understand that the infrastructure for remote work, which I think everyone would agree got a major upgrade during the pandemic, would also make it much easier for companies to outsource software dev work?
No, because it wasn't actually upgraded.
Like be honest, the shift into remote work wasn't surrounded by massive tech advances or upgrades. All the tools that existed for remote work had been there, largely in the same fashion and capability, for decades.
So when you say the infra. and tooling has improved, you need to be specific because it's very hard to point to anything that was fundamentally or notably improved in the pandaemic around remote work.
It all existed before. It was all used before. If you weren't using it before the pandemic that was by choice, not because it didn't exist.
Everything from our communication software, to developer collaboration tools, to how org's track and manage their employees all existed well, well before the pandemic.
It was a cultural change -- not a technological one.
> And that is a change that only happened around the beginning of the pandemic
I'm not sure what you're basing this on. Especially someone's that's had to work with peers across the globe for 4+ decades -- the tools have always been there.
> Companies were already out-sourcing before great video conferencing software or an understanding of how to work with remote teams.
And those experiments failed in the 2000s.
But in the 2020s with an extended pandemic lockdown over 2-3 years, async work was proven to succeed.
I am one of those decisionmakers and the pandemic effect did convince the last stragglers that offshoring by directly managing a subsidiary in Poland, India, Czechia, Israel, etc with ex-American leadership is good enough.
I warned about this during COVID on HN and was downvoted constantly.
Pretending that the 2000s-era experience can inform decisions we make in the 2020s is completely flawed.
Being in denial of the "brave new world" is only going to do you harm as an IC.
Talented workers get talented pay. But global average of talented pay is much different than average of talented pay in HCOL areas.
Right, but, to be clear, that's not what happened in the case of the original post. They claim they were a senior dev who got replaced by several less effective junior devs.
What “managerial” class are you speaking of? Because most managers in tech do not make much more than the developers they manage.
He's likely talking about strategic not operative management. Not the Team Lead of a dev team, but VPs, department heads, C-levels etc, the kind of people who set quarterly goals and sign contracts.
They're an insular and distinct class unto themselves usually, and there's very little movement (or and very different candidate pool) between devs and them.
> Talented workers get talented pay
> It has very little to do with their literal position on earth in relation to a company's real estate foot print.
Which is why they will happily pay for talented labor in other positions on earth.
>Which is why they will happily pay for talented labor in other positions on earth.
Which to be clear: is not happening.
They're buying very low cost labor and are hoping to power through it for some sweet juicy numbers.
What makes someone in India (or the EU for that matter) an inherently worse developer than someone in the US?
(Unless that’s not what you’re implying?)
For India they culturally value different skills and roles. They value pair programming and treat great ideas from juniors as a negative. Japan has a different work culture that doesn't fit the open model in the west.
The issue in the EU is local EU companies don't pay as well because they don't have to (little competition). And a culture of not paying high salaries but paying higher taxes.
Nothing. Don't think I said that, I certainly don't think it.
In that case I’m having trouble following your logic
Not sure where the gap would be, it's pretty straight forward.
Admittedly privileged counterpoint: I want to work with the best co-workers in the world. Most candidates I’ve interviewed both in the US and in other countries aren’t anywhere near that level. If just anybody will do for a job, I’ll probably get bored and frustrated by it.
High pay has been a mixed blessing for the tech field. For every aspiring top mathematician or physicist who’s been tempted by the pay and relevant new problems, I often feel like we’ve gotten 10x as many people who would otherwise have been uninspired doctors and lawyers or top business majors.
Where do you find these people?
Check the pile of CVs that HR rejected. You will be shocked at the talent in there.
Yeah, it is shockingly bad. I’m assuming you’re using “talent” euphemistically here.
For a recent job opening I was looking to fill, HR sent us all of the applications rather than doing their own filtering (they did first round calls with people engineering highlighted).
The level of resume spam is absolutely staggering. So many applicants to jobs that have no obvious connection to their stated skills & experience, with job application questions filled out by LLMs. I’m not saying they’re all bad people, but all of these people who don’t know what they’re looking for other than an income is really disheartening.
Remote work and outsourcing are two very different beasts, and companies have outsourced long before remote work. In fact, remote work is rarely an option in countries where outsourcing happens because the quality of high-speed internet isn’t uniform enough for folks to be able to just work from home.
Additionally, companies can’t just hire individuals in other countries. They have to set up business entities and that costs significant money to do. It’s why they mostly work with outsourcing companies, who often do have offices where these people come in and work.
Everything about this is the opposite from my experience.
No one is talking about outsourcing to body shops like the old times a decade ago. I went from employing offshored devs and IT talent competing with low-effort body shops, to now competing directly with the largest names in the industry for those workers.
It is not hard at all to employ people “directly” in most countries. Plenty of global payroll services that will handle this for you at a small scale, and you just stand up a local “office” with a cheap office manager and attorney on retainer if you outgrow that. The legal entities and structure might be opaque, but the end result is effectively direct employee as far as anyone working with them is concerned.
Offshoring does not mean what it used to. These people are treated and expectations are the same as anyone employed from Iowa or California. The largest difference and source of friction is timezone.
Reliable internet is more or less ubiquitous in the entire world now in any even moderately sized city. It’s not 2005 any more. This is utterly a non-issue. And this was before Starlink. A $200/mo paycheck bonus usually covers this anywhere I’ve done business.
I’ve worked with hundreds of folks around the world at this point. The HN take on outsourcing is so ridiculous to me, and explains the hubris you see here regarding remote work.
This is absolutely my experience as well - so many posts on HN are just in denial or clueless.
> The largest difference and source of friction is timezone.
Completely agree with this, and that's why I've seen much less desire to outsource software work to India or China (like I did in the 2001-2012 timeframe) than I have to Latin America or Eastern Europe (or heck, even Western Europe where dev salaries are still much lower) for US-based companies.
Cannot fully agree with this. I've just been fired from remote job. My remote contact position after 4 years was replaced with internal full-time position. I could convert to employee if I was willing to relocate to Bratislava and take a huge pay cut. I'm in Eastern Europe already, but cannot agree to €40k salary offer.
It's not like they don't have money, it was an insurance company with $1bn in quarterly profit. Market is extremely unfavorable for IT talents currently.
I'd be more inclined to work in the office if most of my coworkers weren't in India anyways. I can't exactly have water cooler talk with Manglesh while he's asleep on the opposite side of the planet. At least at home I don't have to spend 10 minutes of each meeting finding an empty conference room and getting the audio/video setup to barely function.
If you do work with folks in India a lot, it is a really good boost to your group productivity to go visit them in India, as an IC programmer. It is a safe place, people are very good at hospitality, and you can forge much stronger bonds of connection and of shared technical vision when people are people not just arbitrary strings in Slack (video conferencing can sustain connections but it is hard to make them over laggy video at inconvenient times of day).
I have been working from home to various degrees since 1997 or so and I go in more when I need more work to do and work from home more when I am super busy with coding stuff or similar that can be done better and faster from home.
But yeah going to office to sit in meetings with of people in other offices is silly.
this is the funniest comment I've read in a while
Kind of ironic and hypocritical that companies forced people back into the office, but have zero fucks about remote offshoring!
physically being in the office is irrelevant. I can and do have water cooler chats with my remote teammates in the same tz as me while Manglesh is asleep in his
Timezone matters
There are plenty of studies showing that remote work increases productivity that have been published before or after COVID, and similar case studies showing the dangers of off shoring. In a perfect world, a business that correctly understands these studies would be rewarded.
This could not have been said here in 2021 or 2022. It’s disappointing to see how easily opinions change with the zeitgeist.
> All that effort convincing management you're just as effective working remotely was also a collective sales pitch to outsource your role.
Here’s the thing though. People have been trying to outsource software development since the late 90s. Every time I’ve been around offshoring efforts wherever they were implemented, a few years later onshoring would happen again. It turns out time zones, thick Indian accents, and poor quality control have been and still are major obstacles to overcome.
One of the most myopic self-owns by a certain segment of industry I can think of in my lifetime.
I guess folks really did think that location had nothing to do with Silicon Valley paying 4x or more the worldwide average. That there was simply no talent anywhere in the world who could even compete at their level. No project managers anywhere who could do the job for less than $200k/yr.
One the dam broke and it was clear that remote work could be productive it simply opened up a rather insular industry to extreme worldwide competition. Far more smart and talented folks out there in the world than many anticipated.
The hubris was (and is) crazy to me.
It wasn't a "self own" unless you're taking the perspective of Covid. Remote work was forced onto sceptical employers due to shutdowns.
The industry suffers from fads and cargo-culting. Stealth diffuse offshoring is currently in, it's going to take a while for the downsides to percolate: I suspect will mostly boil down to jurisdiction impedance mismatches. What does it mean for employers if it is 1000x harder to extradite an employee to Delaware (or whatever jurisdiction is agreed to in their employment contract) if they clone their product from code? Without e-Verify, what are the chances that your remote employee is a North Korean unit, or working for your competitor? Boom times ahead for corporate intelligence - as well as the traditional kind. How many security teams and policies are geared to face Iran as an adversary? An unstated e-Verify benefit is free FBI COINTEL
There was and is a collective push to show remote work is just as effective as in-office. To the point of absurdity, where there were never any benefits to office work.
It was absolutely a self-own. People not understanding why they were being paid the salaries they were and how replaceable they might be.
It was more or less an entire workforce demanding that their job positions be opened up to global competition thinking there would be no negative long term outcomes from it. They effectively helped offshore their own jobs.
This is just starting - inertia is a thing, and it takes years to stand up competent local engineering teams in various countries. The past few years has simply been laying down the base infrastructure for what is starting to visibly happen today.
Like every person I knew who "went remote" was so they could afford a home. Which they weren't able to do next to office with what you all are paying.
It wasn't some digital nomad work in my jammies lifestyle thing. It gets tiresome to hear: "see it's all your fault"
By no means universal. I was increasingly remote even before COVID because I did a lot of business and other travel--even if I was never officially fully remote until very late in the game. Never moved from the house I owned through a number of jobs with better and worse commutes. But, then, didn't live in California though did live in what is generally considered a tech center.
I think it's both more simple and more complex than AI or out-sourcing, though these are symptoms. Leadership everywhere is just kind of moving further away from reality, and don't care about progress, results, or fundamentals as they focus more on optics and spin, and controlling narratives or choices. Circular financing, ad fraud, trendy scam products or whole sectors.. does anyone want to do anything real when it's easier to make huge profits being fake? Enshittification is another sign of the times, but that's just about products and platforms, we need a better term. That leadership really wants a scammy rotten economy/product/company which ignores quality isn't that surprising, but the extent to which investors and even workers are often onboard too is surprising. Vandalism economy? Expertise simply isn't valued for the same reason that enlightenment values and rationalism generally are on the decline, in SWE sure, but also just in general.
100%
I didn't think about that but you may be right. I think what might be non-debatable is that setting up the ability to work remotely definitely makes it easier to outsource someone's job. Whether that's causal or makes sense with other factors would vary company by company. Remote jobs are easier to outsource, though.
One of my friends from school has long worked in robotics. He showed me a machine he programmed to cut glass or something at a Volvo factory. I asked him about outsourcing back then. He told me his job required being physical plant to assess, program, and monitor it. He was going to stick with that over the higher-paying alternatives that he believed would be outsourced or automated more easily. Today, outsourcing only threatens work opportunities for one of us.
This is the biggest unspoken story in tech.
The era of American developer exceptionalism is over.
Talent abroad has access to the same tools, education, and increasingly, network. American engineers will be replaced wholesale with overseas engineers that cost a fraction of American labor.
You can hire talented React engineers for $50k that will work harder than their American counterparts.
It's not just React. Overseas markets have DevOps, SREs, embedded, systems engineers, you name it.
For years Americans joked that overseas labor was subpar. It's not, or at least it isn't in today's world.
If software engineering is not special and can be done by anyone, so can any other role in a business. So it follows that all American roles will be offshored eventually, including ownership of the company itself - or American businesses will be universally out competed.
I think other business roles have been offshored for a long time now, and software engineering is relatively late to that party
> If software engineering is not special and can be done by anyone, so can any other role in a business.
Indeed, however other business roles have a significant physical presence or face to face component. Sales & marketing, legal, HR, and significant parts of operations and admin have physical presence requirements in most businesses. I would expect finance/accounting to be vulnerable to offshoring, though.
If all the workers are off shore, no need to keep HR state side.
If all the high earners are off shore, may as well sell to them with an off shore sales team.
Don't need local marketers if the market isn't local anymore.
> If all the workers are off shore
I forget that HN forgets that many companies don't sell software yet have SWE teams.
Any company not selling software for $$$ is hopefully not paying bay area salaries for their engineering team.
Mid west engineering teams are low six figure or even lower. The cost savings from outsourcing a team of people earning 90k is meh compared to a team earning 300k.
>finance/accounting to be vulnerable
Aren't there certifications and stuff? I'd think that from a regulatory and legal compliance perspective it'd be better to have Americans handling the books. Say someone turns out to be cooking the books, if that person is halfway across the world good luck prosecuting them (unless your company is wealthy enough to the point where you can mobilize law enforcement to do your bidding)
You only need one person stateside to review and sign off on the work and that person can be outsourced to an accounting firm.
Accounting and bookkeeping already is
Perhaps someday. But for now the USA has broader, deeper, and more sophisticated capital markets than every other country and economic bloc. This is one of the key reasons why most of the largest and fastest growing tech companies are still largely owned and located here.
> If software engineering is not special and can be done by anyone, so can any other role in a business.
What's the logic here other than "coders are the top tier of the labor market" arrogance?
>"If software engineering is not special"
Correction - "The US / Canada software" engineering.
Otherwise people from many other countries are just as good while charging way less.
https://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit...
Absolutely! $50k is ₹45,00,000 which is at the 95th percentile of tech salary in India across all levels of seniority.
So yeah it’s not surprising that jobs are going offshore.
That's really interesting. I did not know that India used commas for numbers like that, 3 digits and then 2 digits, and then apparently 2 digits again?
3,00,00,000 instead of 30,000,000
I am a European, so may be wrong, but it is my understanding that Indians have intuition around lakhs (100k) instead of thousands/millions. Apparently 100 lakhs is a crore (10M), but I haven’t seen that used so don’t know how prevalent it is - lakh is very commonly used though.
https://en.wikipedia.org/wiki/Indian_numbering_system
It was extremely difficult to get used to when I was visiting India for a few months years ago: https://en.wikipedia.org/wiki/Indian_numbering_system
It’s the lakh and crore system [https://en.wikipedia.org/wiki/Indian_numbering_system].
Older than western civilization probably, but does take some getting used too.
Look for Lakh, crore and the whole indian numbering system. It is interesting. Source: I use to live in India.
Any data backing this? If this were the case, why isn’t most innovation done outside the US?
Jobs that have a high 0-1 component will still be in the US but jobs that are more 1-n may be offshored.
Because most of the smartest people in the world moved to the U.S. because of the education system, great access to capital, and the fact that they and other smart people could easily move to, live and work with each other in the U.S.
The U.S. also has the largest useful single market in the world (the EU is broken up across many languages/cultures, China is isolated so you can’t really expand out).
The U.S. is actively working to destroy several of those planks right now.
Even the capital plank, which superficially looks strong, is being hurt by the government picking winners and choosers. If the current govt bets don’t turn out to be the right ones we’re looking at an ugly, probably tax payer funded (OpenAI has already hinted at this) collapse.
> Jobs that have a high 0-1 component will still be in the US but jobs that are more 1-n may be offshored.
It used to be (since at least mid last century) and 0-1 and 1-n jobs were focused here. The world becoming smaller allowed a lot of 1-n jobs to move abroad. But we kept 0-1 jobs here.
That used to be the situation when the country brought people from around the world to be educated and then start business here. And historical precedent allowed us to continue thise advantages by having a reputation for it and continuing to support it. Our country for some reason now has decided it no longer wants to take the actions that fill the pipeline for 0-1 innovation.
And the world just like it took over 1-n is going to take over 0-1.
Why you would choose catalyze that change as an American, I have no idea.
I think there are people that generally believe that there is magic dust that says it can only happen on US soil instead of there being structural actions taken to enable it.
We will all very quickly learn that 0-1 can be anywhere that 1-n is.
It is less so about skills of workers. And more so about having lot of investors who are willing to throw money at everything and then even more after the fact. Or to just outright having enough money to buy out the better ideas.
> If this were the case, why isn’t most innovation done outside the US?
Are you measuring by where the work is done, or where the people signing their names on it live? Two different things.
> If this were the case, why isn’t most innovation done outside the US?
Capital
That's not even close to remotely true. If that is the case, why is the UAE throwing their money at US startups and not their own? They have more than enough "capital".
The ramifications of losing all or nearly all of the tech jobs in the US is that the last "good" place to find better paying work that had a fairly low barrier to entry is now gone. I think that has major consequences for the US economy. I'm 52 and I can't just go back to school and re-tool to become a doctor or a lawyer now. I spent so many years becoming excellent and what I do, including higher degrees and certifications (I never really believed in certs, mind you, I always thought it was a giant scam).
Everything I look into as far as 2nd career goes has a very high barrier to entry and then there's the ever-present ageism barrier to fight, too.
I'm fortunate in that I have enough money to maybe just be retired, but most of you aren't anywhere close to being that financially independent. It's going to be ugly.
I knew for years that the offshoring blitz would finally reach critical mass and I was correct. Now it is an economic conflagration.
> and re-tool to become a doctor or a lawyer now
It's worse than that. Who is going to pay the doctors and lawyers (and other folks providing services) if there are no more US jobs that product stuff for export.
And it's not even about services. Who is going to pay the home builders, electricians, plumbers, etc in a world where there is no money flowing into the US economy from the outside
This is a big issue for young people, too. Every white collar career path is very on-rails now - you're expected to get a degree in XYZ and then get a fresh grad job as a Level 1 XYZer and so on.
So the stakes are drastically higher for 18 year olds picking their college majors. It's effectively a life commitment for a specific career path, and there's a lot of anxiety among students because they don't know if the career path they're betting the farm on will still be be viable by the time they graduate. There's also a sense that if you can't manage to find work in the field you majored in within a year or two of graduating, you've fallen off the track and are condemned to DoorDashing forever.
I'm always amazed at how many older people I know (especially 60+) spent their twenties directionless and then started a decent paying career in their 30s, often by simply learning how to do something and getting a job doing it. I'm not sure what policy platform would make that possible again, but accomplishing it would alleviate a ton of the anxiety that young people have today.
The gap has never been technical. It’s culture.
React Engineer
Maybe, but I was looking for a job recently and most "remote" jobs from US companies were still US-only. Some allowed for hiring people in US timezones or close (basically the Americas). Very few were open to anyone in the world. I get the impression it's mostly the admin hassle that makes most companies avoid it.
Nah, none of this is precisely true. Even if the folks abroad are just as skilled (true), they aren’t as effective because of primarily time zone differences and also language barriers (which is exacerbated by the time zone differences).
Not really, rather industry incentives switched from competing on quality (by whatever metric one might use), to competing on cost.
And developer costs had gotten so crazy, this was the perfect storm.
sure but people on the other side of the world are harder to communicate with for practical reasons like time zones and also for cultural reasons that matter big time in many markets
For certain types of projects it's possible to accelerate delivery by using a "follow the sun" model where at the end of the workday each team hands off tasks to another team farther west. This will obviously decrease productivity per team member due to additional communication overhead and increase the risk of errors, but the trade-offs can be acceptable if the project has to hit a fixed external deadline. Doing this successfully requires a high level of project management discipline that most organizations lack.
> sure but people on the other side of the world are harder to communicate with for practical reasons like time zones and also for cultural reasons that matter big time in many markets
That's a pain management are willing to inflict upon /you/
CTOs are aware of all the tradeoffs
Sure but if the cost savings is significant enough then there is plenty of incentive to overcome (or live with) those obstacles.
Yeah this is the reason most offshoring projects ultimately fail to deliver the promised savings. The overseas staff can never be as effective as folks in the same time zone.
Offshoring is valuable not to save money but to increase the development and operational bandwidth of the organization. This truth may not be known to the decision makers, but it is clear to the workers over time. It does increase the cost of coordination and the difficulty of establishing a common technical vision, but these are mitigatable by for example sending entire software project to one region, with the colocated workers having a higher degree of autonomy to make decisions. One way of partitioning work that fits with the power dynamics is to have all the new shiny things done in North America and mature profitable software is owned by a remote region. Half smiley but this effect is real.
People in Brazil and Mexico can work within US timezones just fine and aren't dumb.
This is my conclusion as well, get the cost center down to good enough after threats from competition is relatively secured.
I think this is going to be a new golden age kf innovation. Lot of senior engineers capable of pencil whipping microservice infrastructure paired with industry experience means startup mill goes brrrr
Or it's just plain, boring cost cutting because finance is looking down the barrel of a grim YoY outlook. Companies are hurting, and GenAI can't get people to spend more money with them.
The regressive housing policies on the west coast are going to completely destroy our international competitiveness.
Salaries for tech are 2x what they should be just due to housing costs.
Seattle used to be where bay area companies relocated teams to because the cost of living here and salary expectations where 2/3rds the bay area, but that ship long since sailed.
Asinine short sighted city councils will be the death of all our jobs and also the death of the only remaining industry that America is competitive in on a large scale.
Don’t you have this backwards? People want to live in the bay because it has high salaries education etc, so the housing market is competitive. Everyone wants to live there
If construction had kept up with demand salary wouldn't have skyrocketed and the overall cost of living would be lower.
High salaries that exist just to pay for high house prices hurt everyone.
Yes. There is a supply problem hindered by politics. But even if all the construction in the world happens, would you be able to buy a 3 bedroom house in SF for 400k? Not a chance. Everyone wants it.
A 3 bedroom townhome in Seattle (actually Redmond WA, more expensive!) when I graduated was 350k, and that was already an inflated housing bubble price. My starting salary was 85k at Microsoft.
If 20k people move to a city each year and the city only approves 10k new buildings, the city is sabotaging its own growth.
Saying "we don't want growth!" doesn't work. Prices shoot up, wages increase, cost of living goes up, the price of everything goes up, eventually it becomes unsustainable and the entire economy crashes.
If 20k people want to move to a city, built 25k housing units. Keep it simple.
Expedite permits, hire more inspectors, simplify building codes, do whatever is needed to ensure people have a place to live.
Exactly this, articles of that tone are starting to surface. AI is often the pretext, because it makes sense to replace labour with technology. The dissonance is why those who make layoff decisions refuse to accept reality, that AI does not replace staff.
One thing also contradicting the "AI can do it" argument, is that a business's playbook is to rather expand the work force in order to multiply the effect of technology. Yet they lay off in waves.
There is no dissonance, just a disguise: Several big tech companies in the US cut their workforce, in the US, while expanding it in countries where talent is cheaper.
Paradoxally, junior folks have it even worse. It has become very difficult to land a job without experience, again, in the US. It all makes sense, if you replace US based senior staff with Junior staff on different time zone, and having a different culture, you are left with nobody to mentor and supervise junior so staff.
I still can't explain how ending up with more Junior staff, offshore, less senior staff and little to no Junior staff locally will pay off in the long term.
I guess I will figure that out, but for now that's one piece of the puzzle I can only call an "economic downturn" outlook.
Sorry to hear, as well as to many others.
https://www.reddit.com/r/Layoffs/comments/1j3c5in/it_seems_t...
https://bloomberry.com/blog/amazons-layoffs-tell-half-the-st...
https://www.theregister.com/2025/03/27/ibm_cuts_jobs_in_us/
I was told that the main reason the “Who is hiring?” thread (and other job boards for startups) has much fewer remote positions that are global (the vast majority is Remote US now) is because of a legislation that reduces a fiscal incentive when hiring software engineers and the reduction is much more aggressive when the engineers are from outside the US.
Doesn’t it affect big tech companies? Only startups?
I would guess the opposite, with big companies being much more savvy and influenced by fiscal incentives.
one of the main drivers is companies like Deel that make it very easy to hire remote workers anywhere and I think AWS will soon launch a similar service
If Amazon’s layoffs aren’t AI driven, and AWS is making more money than it’s spending on AI infra… how is Amazon evidence of AI spending replacing jobs? This is an interesting topic, but this particular article left me pretty unsatisfied, it feels like juxtaposing a bunch of barely related numbers with some very popular talking points, but no new information? It hints at “AI washing” without doing any digging at all, and cites the MIT study without noting that it’s getting a ton of legitimate criticism. Is AI really a sideshow or an excuse for layoffs that big companies were hoping to do anyway, is it taking the blame for low confidence in the economy?
https://www.futuriom.com/articles/news/why-we-dont-believe-m...
https://www.cnbc.com/2025/11/04/white-collar-layoffs-ai-cost...
AWS is making more money, they are not making money running llms. The companies didn't want to reveal internal procedures and exact profit/loss statements, is that surprising to this article writer? Sorry but MIT is more trust worthy than this stonk pumper site.
> Sorry but MIT is more trust worthy that this stock pumper site.
Oh I totally agree with you, this was just the first thing that came up in a Google search. The criticism of MIT’s study has been going around widely, this site isn’t the only one saying that this study lacks objective metrics.
Tbh AI and layoffs aren't direct consequences of each other imo. Just think back to the 19th century where automation started taking factory worker's jobs. Eventually society learned to deal with automation and even though by pre-industrial standards, 95% of the work that was done by humans to make goods is done by robots and machines, yet there are orders of magnitude more factory workers at least today than were back then.
The benefits to some far off unborn future generations we’ll never know are a poor argument in favour of harms happening to us now.
I don't necessarily believe this is the best explanation but: We know the economy is doing pretty poorly and tech companies are consolidating. Amazon is losing it's two main drivers of revenue: Irresponsible startups with huge AWS spend and no pressure to optimize their stack and consumers buying treats online. Regardless if people are spending on AI, the only thing businesses are investing on is AI and analysts at AWS are likely signaling that many AI companies are not seeing a large ROI and model developers will likely build their own versions of successful products (Claude Code). AWS doesn't want to scale up it's GPU fleet and be left holding the hardware bag. Amazon can't juice numbers for consumer purchases since the rest of the economy is contracting, most people are losing jobs, etc. So the easiest way to for Amazon to juice their metrics is to offshore office work that can be done anywhere. They can claim they are using AI - but from conversations with friends who are working at Amazon this does not sound very realistic - and ride the AI bubble with no liabilities.
Large companies add and remove jobs all the time. It's just the the latter gets much more media coverage. Jobs are always being created and destroyed, for all sorts of reasons.
I was laid off recently along with most of the tech team (Australian company ~ very well known brand). There's a handful of people left, but even they know their time is coming soon.
And this isn't about AI (well, not primarily anyway). It's offshoring, offshoring, offshoring.
IMO, what's taking place now is absolutely transformative and the world economy is in the process of being reshaped. It's not just tech jobs that are being offshored - we're just one of the first/early movers. Many other professional/white-collar jobs (accounting, etc.) are also getting offshored at an accelerating rate. And it's happening all over the western world - it's happening in the US, it's happening in Australia, Canada, the UK, etc.
And unlike previous periods of mass offshoring, I don't think the jobs are ever coming back.
I'm seeing the same thing in Australia.
These new tech companies/existing companies were not here for the first wave of offshoring engineers many years ago. basically, the product/service degraded and they brought the product/service back onshore.
It's a cycle that will repeat. Product degrades, there will be public outrage, then they will onshore the product to fix the problems caused from offshoring.
IMO, things are different this time (as someone who has been in this industry for about 20 years now) and I don't see these jobs coming back.
For one, many of these companies are now used to their tech teams being remote. The tools, culture, infra, etc. over the last ~5 years has all become remote which lessens the shock of going fully offshore.
Two, many tech teams in the western world are already partially offshored and have been for some time now. I know where I worked, a reasonable % of the team was already offshore in low COL countries (India, etc.). What's happening now is just the expansion of that cost saving after initial testing of the waters was successful.
Three, the quality gap between offshore teams and their western counterparts is now much smaller, and AI will be used to lessen the gap even further (along with just throwing more bodies at each problem which you can do when your salaries are 1/3rd of what they are here).
Four, many products/services now have captured markets with strong network effects, which means they can weather a heavy degradation of services with little to no loss of customers. It's called enshittification, and businesses are doing it now because they absolutely know they can, and get away with it.
It is interesting that a similar thing happened when millions of manufacturing jobs were offshored to China and other low-cost sites. Now it has come to the tech industry, and every other industry where it is possible. It hurts when it comes to us. (Speaking as a person in tech in high COL). I hope we will find other roles as people found when they moved on from manufacturing roles too
Sorry for snooping—if this is about Foxtel, they were also sold to a UK company this year right?
I guess you’d expect some staff turnover, but not mass layoffs.
Yep, sold to DAZN. Who in turn do all their development out of Hyderabad, India. Almost entire tech team locally is gone now with handover done to that team.
That's an interesting point that I haven't considered before: that the narrative of AI replacing jobs plus the widespread cheating in school using LLMs is making students less engaged and new graduates less employable, becoming a self-fulfilling prophecy for AI.
This is one of the aspects of AI ethics that I don't think gets nearly enough attention: the general psychological effect that information about AI has on people, regardless of their interactions with the tools themselves.
Students getting lazy, or dropping out of subjects entirely because they don't think they have a future in them.
Depression and a general feeling of despair. I see this in programming communities quite a bit - people who see LLMs as an existential threat to their careers and that they have wasted their lives getting good at something which is now being devalued.
"ChatGPT psychosis" - where people talk to LLMs and have unhealthy thought patterns reinforced by them to disastrous ends - gets a ton of coverage. But what about these milder but still meaningful effects where the very existence of AI disrupts people's future plans and self-worth even if they're not using it at all?
It makes more sense through the lens of advancing the short / medium term interests of corporations under the guise of “helping people”.
When we’re all brain rotted and unemployed, how will we spend money on corporations? Its a spiral.
I keep remembering this clip in these discussions:
> I went through this Ford engine plant about three years ago, when they first opened it.
> There are acres and acres of machines, and here and there you will find a worker standing at a master switchboard, just watching, green and yellow lights blinking off and on, which tell the worker what is happening in the machine.
> One of the management people, with a slightly gleeful tone in his voice said to me, “How are you going to collect union dues from all these machines?”
> And I replied, “You know, that is not what’s bothering me. I’m troubled by the problem of how to sell automobiles to these machines
- Walter Reuther, Nov. 1956
https://quoteinvestigator.com/2011/11/16/robots-buy-cars
Btw, the recent Conversations with Tyler had a few minutes on this topic with Sam:
https://podcasts.apple.com/us/podcast/conversations-with-tyl...
It was a bit towards the end, I think.
Why should I listen to the snake oil peddler? Finding real neutral critiques isn't hard.
It's like when we forgot all things that we can google, but on a much, much greater scale. For example, multiplication by heart. I think oral, in person examination should be used with students whenever possible, in order to deal with cheating.
If others are slacking, it's an opportunity to level up and stand out. Also, IMO there are market forces currently reshaping the jobs landscape, it's not only AI, I don't even think AI is the main driver.
No one gets fired for tuning out of temporary tuning out of his smartphone or doing chores the classic way I guess. ;)
I use mobile services timeboxed and in conjunction with blockers for certain services. I also went back to use old-school pencils and paper for work whenever possible. It is helpful - and fun.
Blocking mobile internet on smartphones improves sustained attention, mental health, and subjective well-being: https://academic.oup.com/pnasnexus/article/4/2/pgaf017/80160...
Brain Drain: The Mere Presence of One’s Own Smartphone Reduces Available Cognitive Capacity: https://www.journals.uchicago.edu/doi/full/10.1086/691462
There are two ways of reaching AGI: smarter AI and dumber humans.
They told us TV would rot our brains, but AI actually does.
Or maybe TV also does and the baseline has already shifted into the state of that rot.
In the span of like 2 yrs?
Surely this would be indicated by a glut of unfilled job postings.
Here: https://www.npr.org/2025/11/02/nx-s1-5591302/ghost-jobs-are-...
I don't see the relation. A "ghost job posting" is not evidence of recent graduates failing to meet the requirements of the past; it is a job posting an employer has no intention of filling to begin with.
You said:
> Surely this would be indicated by a glut of unfilled job postings.
I posted a link about Ghost jobs. Then, you said:
>[...]it is a job posting an employer has no intention of filling to begin with.
GP' comment speaks to recent graduates feeling less engaged. Whether it's because they fail to meet the requirements, or the requirements are literally fake doesn't matter. AI isn't used simply to cheat on coursework, but also to erect a de facto glass ceiling viz fake jobs with fake requirements, engagement suffers.
A little bit off topic: but I couldn't even start to read the article because "I reached my article limit" out of I site I never visited before... What are they using to determine how many articles I've read?
Opening in a private window solved the issue, however I'm pretty sure I don't regularly read anything on this site (maybe never was an overstatement?).
Seems totally possible that the limit is 0...
Yes, the thought crossed my mind too... But then I tried a private window and it opened, so maybe the other suggestion that the cookies are very long lived is right.
Exact same experience here.
Maybe their cookies are very long-term and you visited this site 6 months ago?
At the fortune 500 I work at there's no sweeping layoffs that I've seen. There is a big emphasis on AI, but more relevant to the concerns, there are scoped hiring freezes for US workers, new offshore hires are greenlit though. And I can't help but wonder, what happens to a state when most of its critical infrastructure directly depends on another external state.
Lost my previous job not to AI but to a pincer movement of Indians taking up positions here in the UK effectively forming a bridgehead to subsequently have the non-management roles outsourced to India. From purely my own anecdotal experience, I found my Indian coworkers very friendly when I could provide something, but once they had the whip hand their attitude was markedly different.
They then get visas for the outsourced workers to bring them over. And I’m sure they get a nice backhander for arranging it.
https://archive.is/9sdT5
This week OpenAI, Google, And Perplexity announced free 1 year subscription to Indian devs. It must cost quite a fortune in inference https://www.bbc.co.uk/news/articles/c14pr0enjr6o
Not a single mention of jobs being moved to India including tens of billions of investments in new offices.
Backing links from a quick search earlier this week when an obviously Indian HNer tried to deny this was really happening:
Microsoft announces US $3bn investment over two years in India https://news.microsoft.com/en-in/microsoft-announces-us-3bn-... (Jan 2025)
Google announces $15B investment in AI hub in India https://apnews.com/article/google-artificial-intelligence-vi... (3 weeks ago)
[Indian] ex-Accenture CTO named Google Cloud’s Chief Product https://www.hindustantimes.com/trending/us/who-is-karthik-na... (last week) (a lot of people speculate they named an Indian Accenture guy to move as much as possible to India)
Big Tech giants defy US-India trade tensions, record strongest 12-month headcount growth in India in 3 years https://www.moneycontrol.com/technology/big-tech-giants-defy... (September)
https://www.reuters.com/world/india/openai-launch-first-indi...
https://www.anthropic.com/news/expanding-global-operations-t...
and so on. Something very crazy is going on.
NOTE: I am not American and this doesn't affect me directly.
A lot of “AI” investment in countries like India is just annotation and labeling kind of work .
It has so become huge there, that is getting to similar size as the traditional call centre industry, hundreds of thousand of people work on curating data for model training.
Google hiring a senior lead who can scale low skill business processing massively is just inline with that.
Any compute investment is largely local . Internet and Electricity is expensive and erratic, there is red tape, loads of import duties, there are dozens of cheaper places for cheap data centers.
All this to say it is not the kind of outsourcing you think it is.
—-
There is a some amount of high tech outsourcing happening, those are driven by challenges in getting even a business visa in last 5 years.
those numbers are quite small in aggregate won’t be news worthy.
India simply does not have that kind of high quality talent pool .
The education system is both expensive and very poor. There is shortage of qualified teachers, even bigger shortage of good ones. Students and parents just want to get a “degree” /maximize scores to get a job, There is little interest to learn.
> is just annotation and labeling kind of work
Given that this is presumably all data used for RLHF'ing, I wonder how much of this is responsible for things like LLM "sycophancy" or the issue of "hallucinations". What if the reward-hacking entity isn't the LLM/optimizer but the human annotator in the loop.
> A lot of “AI” investment in countries like India is just annotation and labeling kind of work .
Then why are they giving one year of free accounts for developers to the whole country? Remember they have about one million CS graduates every year. Do you see the scale of costs?
This is a sales tactic, in the same way that Jetbrains and Microsoft will give out free licenses for students in the hopes that some of them will go on to work for employers who will then buy the product. It also helps convince investors about potential growth and MAU increase.
Same goes for the OpenAI and Anthropic office announcements posted by the GP, these are sales offices with very little tech employment or outsourcing happening.
Re “investments”: these are also not what you think. I remember when Amazon was partnering up with schools in the US to provide “machine learning education” where said education was thinly veiled ads for managed ML services like Sagemaker and Rekognition. I wouldn’t be surprised if the $3B investment from Microsoft was primarily free courses and certifications to cultivate a market, as well some annotation work (I know that Amazon has been hiring quite a few people to do this kind of work).
A lot of IT work that gets done in India is low skill things that could be automated even before AI codegen tools. These jobs are particularly vulnerable to AI productivity gains .
The thesis here is that current gen tools should enable 2 people do the work of 10 and LLM models get paid the budget of 2-3 devs.
The outsourcing org comes out ahead with spending only 70% as before (salary of remaining devs will naturally increase)
——
India is by far the largest market for this. 1yr free is for same reason any VC funded company discounts their product or gives it free first, or Microsoft famously rather have you use their software pirated than not at all.
This is only to get adoption, if your workers only know how to code with Claude or Codex then you are going to buy those tools as a company
Nobody is going back once you get them to change. OpenAI et al hope to capture 30% value of the IT outsourcing sector while making to cheaper by 30%. There is no free lunch.
——
The number of CS “grads” are not a useful metric for India.
The industry shifted to hiring other engineering streams to any grads with aptitude to learn a long while back.
The vast majority of them don’t have any programming skills, don’t have critical thinking skills, are poor at communication.
They are unemployable. Don’t take it from me, NASSCOM says this too.
The degrees are largely from mills that charge up to $80k-$100k (med degrees go even higher) promising jobs but don’t teach much.
For the same reason legacy publishers sell expensive textbooks at 1/10 of the price in India, identical to the USA version save for a stamp that says you can't export them from India.
I'm a bit surprised that Trump isn't going after outsourcing in the same way he went after H-1Bs.
Not that I believe Trump actually cares about US jobs, let alone thinks strategically about the importance of a strong software sector, but you might expect him to at least do another mafia-style shakedown of the companies outsourcing jobs. Heck, you might think he'd even care about all the lost tax revenue, by having developer salaries going to India rather than staying here.
> I'm a bit surprised that Trump isn't going after outsourcing in the same way he went after H-1Bs.
They might use it for the next elections, all the white collar jobs are going out of US, they will bring it back if you elect them again.
Check out the HIRE Act.
Looks like it's being pushed by a Republican senator without obvious support from the other side.
I'm sure Google, Meta and hundreds of other companies will pay big $$ to make sure nothing comes out of it.
Interesting - thanks!
Confirmation bias, maybe? 15B is like 1.5% of a trillion dollars currently being invested in AI..
> a lot of people speculate they named an Indian Accenture guy to move as much as possible to India
Having dealt with A LOT of Accenture “devs”, how do I leverage the barn and then some to short Google!
AI is absolutely replacing jobs though. I personally know multiple people whose companies have downsized departments or eliminated departments completely, offloading the work to fewer people using AI tools.
Here AI is more like a magic solution to stretch the employees you have. I don't know a single person who has been replaced by AI, but plenty of companies and government office hopes to be able to get more work done fast with AI. I doubt it will work.
No the OP is right, we had a whole department vanish: translators. Half laid off and half absorbed to other roles. I am waiting for this to backfire eventually, but even if it does, it will still be cheaper to handle the backfire than employing all those people.
Can you list a few tools that replaced jobs?
At a big hospital system, nurses call patients with complex medical issues and help organize appointments and tests and whatnot. Previously, they had about 20 people who would transcribe recordings of the calls and then write up documentation for the medical records. Now AI transcribes and writes the report and sends it to the nurse to sign off / make edits.
I've been seeing AI-based call center software replacing jobs in droves. This has affected my company negatively as well, since a good chunk of our own users are call center employees.
The article seems to hinge on the core assumption that revenue is much less than spending:
> Those expenditures may be approaching $1 trillion for 2025, while AI revenue—which would be used to pay for the use of AI infrastructure to run the software—will not exceed $30 billion this year
While it's clear that the author is summing up the spending from the big players, it's not clear to me that their math is right for revenue. Yes, OpenAI, Anthropic, Thinking Machines, SSI, etc. have pretty limited direct revenue (including zero!).
But this comparison assumes no revenue growth for other top computing users. Some companies are certainly saving money on some tasks and increasing revenue, particularly in fields like customer support. See the confusing figure in section 5 of https://hai.stanford.edu/ai-index/2025-ai-index-report/econo... .
That chart is by number of respondents and not weighted by revenue. Like the MIT study, it would not be surprising that "just pipe this to an LLM" isn't enough for most fields or companies. But a few have likely made material improvements.
10% of respondents saying they've seen a >10% revenue gain could be substantial, if they're bigger firms with high leverage in computing.
Edit to add: the comparison also makes a classic "GDP vs market cap" style mistake. Capital expenditure has multiple years of useful life. Revenue is annual. You'd want to compare depreciation vs revenue.
There is certainly pressure to spend money on and use AI tools. I know multiple people at different companies whose managers brought up low AI utilization in their reviews. This is, of course, really stupid but here we are.
Why? I look at this. I want engineers to use the tools on the stuff that AI is good at so we can do more high value work.
I'd say it's more "cost reduction" overall. And it makes sense to me. From my experience over the last few years, features are increasingly lower marginal ROI, and seem to take longer and longer to launch because the amount of coordination required keeps going up. Plus generally expected revenues in this economy are trending downward, so it only makes sense to reduce staffing and focus on only the highest priorities.
I'd say the biggest problem is AI complacency, something like: "in the future our revenues will be the same but won't need any people". So, in order to prepare for this future the obvious course of action to do some layoffs and just chill for a while. The problem is, we don't really know when this future will happen. If it is soon, maybe companies are making the right bet, if not it is more like a deliberate choice to slow down. That's fine if one or a few companies choose this path as competition will correct the error. However, if they essentially all move in unison competition won't fix the problem and we'll have a self-inflicted economic contraction for no reason.
The other factor is, will revenues really stay the same for companies once we have AGI / super intelligence? It seems value will not accrue to the companies that are in chill mode.
Here's a fictional take on it, yet sadly based on real events: https://syntheticauth.ai/posts/synthetic-auth-the-power-prob...
American devs should support the hire act bill
25% isn't nearly high enough. Seems more like a government money grab than an effective tool.
Just a shake down. "Be a shame if your store windows were to break" Or like the Tylenol thing being a setup for hostile takeover
I think the article is missing two points: if the latest layoffs aren't related to AI, then this doesn't mean AI won't have or has an impact on head count.
And investment and experiments by definition include the risk of failing. In almost everything lies a survivorship bias and no one talks about the 100+ car makers that went into goldrush mode 100+ years ago. This is life. Netflix vs Blockbuster - already forgotten?
Also the "fail rate" - so what part is failing and why? What's with the 5%? If we have a look at exponential functions this might be a really good deal, if the 5% can account for the losses. After all, benefits compound over time.
I witnessed first hand in FAANG some quota hires and I believe that now that no one gets paid for contrived and artificial business advantages, we are back to a more merits based evaluation of workers.
But AI should not be written off as fancy something with no impact. That's the wrong take. Whether it will be a springboard to new jobs that compensate for losses or replacements - I am not yet sure, but tent to be in the former group. ML engineers take care of ML - something new that takes care of something new.
We will see.
I think the company I work for has a pretty pragmatic approach for AI utilization. Don't use it to replace jobs, use it to make jobs more efficient (we call it an "enhancer"). IE we won't lay people off, at least not because of AI, we just may not hire as quickly as we did before LLMs, but still attaining similar scale. This goes for all departments, not just tech. We have very strict standards on what code gets accepted (no slop). Whether it's AI generated or not is irrelevant; even senior engineers can be guilty of slop after a long day. But we do have regular meetings to discuss our AI usage and to converge upon common patterns and rules to level everyone up.
That being said, I think we as a society are quickly reaching the point where there just doesn't exist enough jobs to keep everyone gainfully employed. There may be new jobs opening up but not ones that people in the middle or ends of their careers can quickly pick up on. I don't think this is a bad thing necessarily, just that when combined with the shitty safety net that the US has, it's a recipe for disaster. If even folks who are working full-time still need assistance for groceries, then we've already failed, and that's not even AIs fault.
>use it to make jobs more efficient
I left IT for the time being, but I ask copilot.microsoft.com a question once in a while to see if we've got to AGI yet.
Today's question (I admit not so creative) was what's the market cap of TSLA.
Its answer was "Tesla Inc. (TSLA) currently has a market capitalization of approximately $429.52 billion USD. This figure is based on the latest trading price of $429.52 per share"
It allegedly used a web search to find this out, and it included a screenshot showing the market cap as $1.4B.
On the other hand, chatgpt.com prudently tells me to go look it up myself, because it doesn't have live data.
I guess OpenAI is winning?
Slightly tangential to the article: a lot of the "AI layoffs" are really just old fashioned layoffs, but with exciting press releases meant to reassure investors.
AMZN for example overhired in various functions because it expected demand that never materialised. Admitting that is bad for the share price, but writing some woo about "AI and agility" will convince at least some investors to keep the faith.
I can tell that editors doing CMS translations, marketing images have certainly been replaced.
Likewise many tasks I used to do with Java, .NET, Node.js, have been replaced by low code/no code tools with agentic orchestration.
Thinking that AI isn't replacing jobs is wishful thinking.
Those are tools, not jobs.
If AI really generates the value it claims to cutting jobs is short sighted. If existing human knowledge is commoditized, then we should be able to invest in generating new knowledge, and creating new kinds of products that were not even possible before.
And if AI makes workers more efficient, then businesses not actively hiring more employees are admitting that even with extra resources they have no strategy to grow their business. Like, if one person is effective as ten people, then a business should be able to grow quicker since their operating costs are effectively lower freeing up capital for growth.
So either their business is a dead end, the inefficiency is at the management layer, or AI isn’t actually making workers more efficient.
It's true. Instead of talking about cutting jobs, we'd be talking about all the new companies building new things and AI itself wouldn't be the story.
Instead we're still talking about cost cutting. Seems the market is not focused on investing outside the AI moonshot gamble.
Matter of time until markets reckon with AI investment crowding out non-AI investment (cf. the massive oversubscription of Meta's latest bond offering). Must suck to be a small-cap firm squeezed by tariffs raising costs, unemployment lowering demand, and AI investment raising your own non-AI cost of borrowing.
AI isn't replacing jobs. AI spending isn't either. It's outsourcing and can be easily confirmed by cross-referencing H1B approval rates with layoffs.
If you've been outsourced, ask your representative to support the HIRE Act: - Creates a 25% tax on outsourcing payments - Creates a “Domestic Workforce Fund” for apprenticeships/workforce development. - Prohibits companies from deducting outsourcing payments.
How do you prevent thin wrapper organizations that just contract out “services”?
If we're hypothesizing, then the thin wrapper organizations should or would bear those same taxation and penalty costs when outsourcing and their prices would also be going up.
You don't, you get turtles all the way down the same way they avoid taxes.
AI spending is replacing jobs now but all of this spending is in preparation and anticipation of the real AI replacing jobs
I think it's not even AI spending, but just the end of ZIRP.
This should shock no one.
Over the last 20 years of tech, the giants have taken the smartest folks out there and put golden handcuffs on them. You could hire up all the smart folks and put them to work, or leave them out there and have them compete with you. With the launch of cloud providers and (expensive) dynamic scaling the problem only got worse. Think about hiring in the pandemic. Every one at home, with a stimulus check and nothing to do. Rather than a flurry of new software you got mass hiring.
But now we are in a capital intensive hardware cycle. Where in order to compete you need to have lots of $$$$ as well as software know how. It does not matter that there are smart people out there, without hefty backing they wont get very far.
I suspect that software is about to enter its "punk" era. We have software for small businesses that will help with accounting, HR, customer service, and cloud providers are starting to see some interesting competition. Much like the old punk poster showing you 3 chords and telling you to start a band it is entirely possible to find three friends and start a business that makes 1-10 mill a year with little effort and lower costs. The moment you stop thinking "unicorn" and start thinking "sustainable" the economics shift radically.
Not to mention that there's already a small market for software products that work just like existing products that were once good, only without all the AI getting in your way at every turn. You're just not going to be making huge enterprise sales with such a product (in 2025).
Funny to me how many of the replies to this comment are assuming you mean all these "punk" startups will be possible because of AI, when your actual comment says nothing of the sort.
AI is another enabler, but by no means the primary one at all.
340 millon Americans. Reach 10k of them at 10 bucks a month and you have a business that pays for a couple people to live comfortably.
Yeah with ChatGPT anyone with enough agency and programming chops can design tailored solutions for local businesses.
I don't think that ChatGPT coding is valuable but rather it's ability to tutor people and guide them towards idiomatic patterns.
The effort in those businesses was never coding, it was always connecting with and selling customers, understanding them, and supporting them as time went on. AI can help with some of that but generally the connections and network effects have outsized contributions in the smaller niches.
I think you're on to something, but interest rates probably have to come down a bit more for it to really have legs. We definitely need a response to enshittification though.
MCMA: Make Class-warfare MAD Again
https://archive.is/9sdT5
AI processing hardware deprecates (and depreciates) at a much faster rate than conventional CPUs, as much as 50% per year. Consider the billions being dumped into compute at that rate of depreciation and explain to me:
1. How will tangible assets generate profit net of near term capex requirements and interest on debt?
2. Why wouldn't payroll shrink as a result of the increased AI capabilities emerging from the capex spend?
3. If AI lives up to the hype & given recent news that public backstops are being requested, why shouldn't the US quasi-nationalize cash strapped players and distribute equity to every American?
4. As NVDA and AAPL local models and local compute eat into utility and base automation business, how do edge players maintain profitability without pricing capabilities well beyond the affordability of SMBs and individuals?
Why not both?
Given all those articles with AI generated images I bet that some artists lost their jobs
I doubt. Good artists are still killing it. I see it on social media all the time. Also, corporations rarely care about the art as part of business. I don't remember the last time a tech company (or finance, wholesale, manufacturing, etc.) hired an artist. It is part of the job description of some managers, maybe, but who cares about someone with mediocre Photoshop skills?
AI is just the scapegoat; otherwise we should see jobs like administrative assistant, legal, and medical replaced first. But I also think engineering is the worst field to get into. It's neither protected by a license like other white-collar jobs nor by a union like most blue-collar jobs. You end up overworked plus debt from school like white-collar workers but getting paid worse than blue-collar workers. And everyone's okay with that for some reason. Not a single organization is trying to change it. The government is happy with it, companies are obviously loving it, and on top of that, engineers are building the systems to replace them in a few years and they still think they are smart..
Software development is by nature a boom and bust industry, probably most like film. It’s about creative and isosyncratic contractors picking up projects when they are available.
What most people aspiring for a white collar career probably want is a job in IT - managing technology for business is much more stable than developing novel tech.
If the thought of needing to move or lose a job strikes you as horrible, this is not a likely career path for you.
Neither software development nor IT work is engineering work and shouldn't be considered one either. I am talking about engineering jobs, jobs that you went to school for 4-5 years in an engineering discipline, not a few weeks bootcamp or made-up program like computer science only to be called an engineer later, diluting the whole industry in the process. So yeah, software development might be boom and bust, engineering is not.
The first civil engineering degree was minted less than 200 years ago even though we've been building civil infrastructure works for millennia. There were plenty of mishaps along the way for that field too.
The creation of the first digital computer is still within living memory. The state of the software industry and its maturity is doing ok given its youth.
Yep. I’m talking about the software industry. Not working on planes for Boeing.
> made-up program like computer science
Sounds like you have a personal axe to grind. It’s ok lots of people have undergrad EE degrees.
there's the PE license
It’s not mandatory, if an employer chose not to care about it, you won’t find any legal issues otherwise in most engineering jobs, that’s not the case in say nursing or legal work. Unless there’s a regulation that requires any engineer should pass certain criteria as seen in other white collar jobs, then it won’t be considered.
I can't read the article but that won't stop me from commenting..
This year alone something like 400B was spent on investing in chips, datacenters, electricity buildouts. That's 400B that could have otherwise been invested in people.
While i don't doubt that people will find a few solid business cases for LLMs, i am on team-bubble. I don't think this investment will add 400B worth of value and I very much doubt that this 400B is any good for future growth or long-term aspirations of AGI. Investing 400B into people and (tech) manufacturing would be a solid long-term bet with benefits.
Bah, all of that is still employing people. Companies have completed almost $1T of stock buybacks this year. Since 2018, with the exception of 2020, that number has been between $800B and $1T every single year. And that number has been more than $500B since the 2008 recession. AI spend is bad but it’s not even close to how much stock buybacks have ruined the employee wages and employment prospects.
You think the companies are just going to give you the money if they don't do buybacks?
No but the point I was making was that AI investments at least generate jobs and allow money to flow to people, stock buybacks don’t even do that and are much bigger in magnitude.
> that AI investments at least generate jobs
Nobody said they don't, but these are very few highly payed jobs dwarfed by the number of lost jobs due to capital misallocation. That's the point of the OP which for some reason got lost in discussions of unrelated issues like outsourcing.
Besides, a lot of the AI investments go to Taiwan and other Asian countries where all of the AI hardware is made which makes non-AI hardware more expensive too - a huge cost on the economy. The recent Taiwanese factories in the US don't change that.
It’s mildly infuriating that we keep cutting corporate tax rates and using debt to finance public spending instead. That trillion dollars of buybacks would balance the budget with likely minimal impact on GDP (I mean clearly these companies don’t need the money).
Imagine if 10% of that money had been spent just training young people, or on a new cohort of PhDs. Imagine what benefits we would have reaped in a decade's time.
With $400B you should be able to do pretty much anything you set your mind on. Want to do to Mars, not a problem. End world hunger, $400B will do that in about ten years. You can do ANYTHING with $400B, yet OpenAI want's to sell erotic chats and show you ads?
I'm not saying that LLMs and the current AIs aren't useful, but they aren't worth even close to $400B. Some of the progress, especially in the medical field, is amazing, but the spending is completely out of proportion with the gains. It only works because right now people like Sam Altman has sold people with money on the idea and now they have to continue to peddle their sneak oil, hoping that the money won't dry up.
This does not reflect my reality. I have worked on half a dozen projects where we would have hired consultants to get the job done but have used coding agents to document, understand, migrate a project, create backend services, dashboards, and other things with budgets ranging from a few thousand euros to 200,000 euros. No consultants hired, nothing spent.
Same - the leverage in using this tech is unbelievable for those who have a lot of experience. Folks are in denial.
What job did the llm do that was worth 200k Euro to you? Be extremely specific w/ hours worked etc bc we all totally believe you!
In our case - agentic loop optimization of kernels. Works like a dream - after all, you have a perfect python spec (validation), the kernel is small (under 10 kloc), and the entire thing is testable. The trick is to have enough back test data so that things like cache behavior are taken into account. Ended up with different kernel versions for batch-back-test vs real-time work - which was interesting. 5 years ago would have hired about 10 ppl for the job - now 2.
How many man hours would it take 10 ppl to do this job?
It was an innovation project, with an endowment of 200k. The task was to implement an llm based bot platform in a company with 700+ coworkers. After demoing MVPs, got 40k and access to experts I never needed to use. Deployed open source AWS solution, built customizations, landing pages, and data crawlers entirely solo using AI coding agents over ~3 months while working on other projects. Zero consultants, zero internal help. Would have easily burned the full 200k the traditional way.
So you still had to put in ~3 months of off and on again work, how many hours did it take you over those three months to configure everything yourself? Then figure about how much would you have had to budget out w/o the llm's help. Show me your math. Then of coarse you'd have to follow up w/ the company whether their "llm based bot platform" wasn't just a complete waste of their 200k in the first place for this to matter at all.
Do you think a developer's monthly salary is $70k? I think the winner is obvious, assuming his product is really worth something and he really had $200k budget for it.
Absolute garbage site. After all the popups it redirects to some general page. No sign of OPs arcticle.
Everytime automation replaced jobs the economies created by this replacement always created new jobs that replaced the previous ones. The USA has always been on the forefront of automating away jobs and it's unemployment rates show that new jobs were always created and that there was no long-term unemployment due to automation. AI won't be any different.
We shall see. Most automations didn't automate the "controller/intelligence" part - they automated the actual task's labor (even if it was clicking for hours on a computer screen). Someone still needed to make all the decisions at every decision point. AI is fundamentally different if it approaches what AI proponents want; it surpasses human intelligence and has "agency/agentic".
On a side note this is why I find proponents that state people with agency will thrive in the AI world puzzling -> isn't the whole point of "agentic AI" to have "agency"?
With no advantage left (e.g. strength, intelligence, agency, etc) even if new industries come about why not use the AI for those too? Unlike previous industries where new domains needed more "brains" to drive/direct it, we have AI now. AI isn't a tool; it can for example deploy and can make decisions for itself. That's what the obsession with "agentic" is all about - replacing agency which at the moment was the very general domain that you still needed humans for.
This strongly favors the economic means of production remaining that are still scarce (capitalism rewards the scarce, not the efficient). Land, capital, social connections/nepotism, etc. Logically people without these will be less economically and socially valued in general - I hope I'm wrong. The current productive class have the most to lose from AI.
AI IMO breaks meritocracy and skilled based work long term assuming they succeed. Even if not in the next decade, and not the current crop of companies pushing it I'm sure AI will eventually cause this outcome.
This article gets the phenomenon right but the causation wrong: it's not "AI spending vs. AI replacing jobs". both are happening simultaneously, and they're causally linked.
The spending-revenue gap is real. Hyperscalers are projected to spend $300-550B on AI infrastructure in 2025[1] while generative AI revenue won't exceed $30-40B [2]. Amazon's capex jumped from $48B in 2023 to $84B in 2024 to a projected $100B+ in 2025[3], that's capital intensity doubling from historical norms of 11-16% to over 22% [4].
But here's what the article misses: this isn't financial desperation. When Amazon's CEO announces 14,000 layoffs and explicitly states that AI will enable "fewer people doing some jobs"[5], he's revealing the strategic logic — show me the incentives and I'll show you the outcome. Companies aren't cutting jobs despite AI spending; they're cutting jobs because they know AI spending will pay off.
To be clear, the article treats the spending-revenue gap as evidence of irrationality. But infrastructure buildouts always precede revenue: railroads looked insane before they transformed commerce, electricity grids consumed massive capital before delivering returns, the internet required enormous infrastructure investment before creating trillion-dollar companies.
What's different now is companies are pulling the future forward. If we take this article at face value which I can appreciate is a BIG “if” then AI is already automating 25% of tasks and delivering 10-55% productivity gains[6] so they're not waiting for AI to replace jobs organically. They're cutting headcount now to fund the infrastructure that will make those cuts permanent.
More broadly, this is rational capital reallocation in a winner-take-all race. Companies that don't build AI infrastructure won't gradually decline, they'll lose competitive positioning entirely. That's why Meta is using off-balance-sheet financing for a $27B data center[7], why Oracle is borrowing $25B annually despite already carrying 450% debt-to-equity [8]. They're all-in because the alternative is obsolescence.
The real story isn't "spending causes cuts" it's that AI infrastructure commoditizes human expertise, the complement to compute infrastructure. Companies are trading labor costs for compute infrastructure because they've correctly identified compute as the new moat. The job cuts aren't the price of spending on AI; they're the business model shift that AI enables.
The article is right that we're not seeing mass AI job replacement yet. But the job cuts are happening in anticipation of replacement, not as an unfortunate side effect of spending. That's not desperation just business strategy.
-- 1.(Morgan Stanley: https://www.datacenterdynamics.com/en/news/morgan-stanley-hy...) 2. (Grand View Research: https://www.grandviewresearch.com/industry-analysis/generati...) 3. (CNBC: https://www.cnbc.com/2025/02/06/amazon-expects-to-spend-100-...) 4. (Cerno Capital: https://cernocapital.com/accounting-for-ai-financial-account...) 5. (CNBC: https://www.cnbc.com/2025/10/28/amazon-layoffs-corporate-wor...) 6. (PwC: https://www.pwc.com/gx/en/issues/artificial-intelligence/ai-...) 7. (Fortune: https://fortune.com/2025/10/31/metas-27-billion-bet-turns-ai...) 8. (The Register: https://www.theregister.com/2025/09/29/oracle_ai_debt/)
"they're cutting jobs because they know AI spending will pay off."
They think they know.
They hope they know. They hope they're not in a bubble. It's the same hope that keeps people in a ponzi scheme.
This misses the point. The expenditure is financed by stock price increases driven by retail enthusiasm. Meta hasn't spent 1 dollar in AI that it hasn't made in increased mcap. The moment that dries up all the data centers are cancelled. You don't play with the food you eat.
wait until the GPUs and data centers start getting written off for being obsolete in a couple years when we still have nothin but fancy auto complete.
I'd be glad to take any sweet obsolete enterprise HW off them.
interesting questions, how will this unroll
right now I see even old GPUs like V100 are still popular. Maybe the old GPUs will shift to the countries with cheap electricity?
Probably could be repurposed for something else though?
You can already buy cheap but powerful old servers. But newer hardware tends to be more power efficient. So, depending on time horizon you consider, it might be cheaper to buy newer hardware.
Assuming that GPUs power efficiency will increase, the same will be true about them.
Mining crypto if we're unfortunate.
what else could possibly use that much compute? especially somewhat specialized compute, not suited for general purpose compute?
The one truly hopeful aspect of a bubble-burst scenario is that extra capacity always finds a use-case, and in this case practically any other use-case would be both less harmful and more real.
Before the AI craze, all the GPUs were being bought up by cryptocurrency miners, and I'm not sure that's better. Even as an AI skeptic I think AI is a better use of all this hardware than cryptocurrency.
Imagine if you spent those years building something else.
Yes, like renewable energy infrastructure (which China does, and would be highly useful anyway in case generative AI does live up to its promise).
Even if generative AI lives up to its hype, with current US administration there's no way America is going to lead the race for long. There's just not enough energy available, when those in power oppose developing many of the energy projects that make most economical sense.
This is absolutely crucial to understand.
Because in any country with poor worker protections, the outcome is layoffs regardless.
AI succeeds? Layoffs of unneeded roles.
AI fails? Layoffs to cut expenditure to make up for the written-off expenditure.
In the UK, if AI makes a well-established employee redundant, the employee is entitled to redundancy pay. And if the company fucks up and overspends on chasing a ridiculous Macguffin they can't just fire people without making them formally redundant.
The damage that is going to be done in the USA if the AI bubble bursts is going to be generational.
It already is. The US is currently missing an entire generation of journeyman tech workers because they never got hired in the first place. It's like when Cash for Clunkers got rid of so many used vehicles that it caused market distortions for years.
There is incredible norlmancy bias lately and hopium. Yes it does and yes it will much much more. Preface all writings with "yet" if you will.
I read in multiple somewhat off-beat sources lacking good info (in the sense "They did not back up their writings and don't enjoy an impeccable track record of such high regard that I will take their word for it", not in the sense "its known untrustworthy drivel") that the hiring rates in the US in particular for 'junior developers' is way, waaaaaaaaaaay down. As in, off a cliff.
I wonder if that's true; I'm not in the US myself so I can't exactly just go have a drink in a place with lots of devs to try to find out.
The reasons are somewhat obvious:
* World economy in general and the US in particular is a rollercoaster, with the current administration being apparently dead set on flip flopping on every decision it makes, and always making extreme decisions. That's not a good time to invest. Hiring juniors is investing.
* AI not necessarily replacing the jobs, but that's not actually relevant: AI has already torpedoed the general notion that 'if you have investor money you gotta spend just hire a bunch of folks; # of employees is the primary yardstick to check company size / success', whether AI works or not. If the boss tells a VP to 'use more AI to get a handle on hiring practices', then they're going to stop hiring juniors because it looks like you're outright refusing a direct order if you hire a bunch. Even if AI 'employees' are useless, you are strongly incentivized not to hire juniors in such an environment. Juniors both lost the job opportunities stemming from companies just hiring folks because they have enough cash to do it and no good idea on where to spend it, and the downside of looking like you aren't on the AI hypetrain, if you hire juniors.
* There's evidently been a rather massive push in particular during the previous administration to get folks from dead end jobs into IT, so there's now an overwhelming amount of junior devs, and many of them didn't naturally get drawn to the profession; they were told it's an easy way to get a steady job.
* Even though there's some downturn/uncertainty, seniors/mediors aren't being fired because companies still remember how expensive and difficult it was to (re)hire dev teams post COVID. But that just makes the market for juniors even worse and makes it harder to hold out hope. When everybody is getting fired, then once the economy is in better shape you stand a good chance. But that's not happening; those mediors and seniors are continuing to get job experience whilst the juniors aren't.
Those 4 combined: Sure, yeah, I can imagine your average junior dev's odds to get hired are at this point well into the single digits. But is that actually true?
Many are predicting the AI bubble will burst soon. Then we will see massive layoffs.
The layoffs have already happened though. Companies are cutting massively even when it's supposedly good times. That's the story.
Massive amounts of people with unsustainable lifestyle will stop consuming stuff. How will the whole capitalist economy continue to function with massive amounts of medium-high income people not having the same income anymore ?
It's complete market failure.
By the time the AI bubble bursts, those that have investments in those companies would have already exited.
Then in 10 years time, they will look back at how they scammed the back off of the layoffs with AI driving the entire problem.
re title
I literally just said that on Reddit:
"They [big companies] were already laying off lots of people and hoarding around 100 billion in cash. This has nothing to do with AI. The elites have been at that for some time for who knows what reason. If anything, they didn't start spending money until the AI boom.
You could say AI is destroying jobs for a different reason. The leaders of the companies believe in gold rushes more than a steady stream of investments into forming and growing actual businesses. They didn't or don't believe America is worth investing in. They're simply about extraction."
So, jobs are being replaced by AI spending (not by AI), and AI spending is increasing because of AI, which means AI is replacing the jobs. Did I get wrong?
I suppose the distinction is worth making, since if it was actual AI replacing jobs, i.e. AI that is capable enough, today, to do someone's job, or more likely to increase someone's productivity so that headcount can be reduced, then that would seem a permanent shift and is only going to ratchet up.
OTOH, if it is only dreams of AI, manifested as AI spending, or CEOs laying people off thinking that AI will soon (even if not today) be capable of backfilling them, then this may well backfire, and will be "reversed" if demand is less than forecasted and/or job-replacing AGI doesn't materialize, and all we get is productivity tools, useful mostly for a narrow band of jobs.
Incidentally, I think Karpathy might be right that there is pretty much only one job that seems it actually could be replaced by AI today, at least potentially, which is call center tech support, or customer support, staff, who are dealing with a narrow domain and just reading off a script.
Spending is happening only because, it promises to replace workers. And that possibility arises only because AI exists. Spending is only a means, not a cause.
Sure, but is the cause "AI" (here today, doing someone's job), or "promise of AI" (that may never materialize anytime soon, either in quantity or capability).
correct
From the article: "We have been following the slow growth in revenues for generative AI over the last few years, and the revenues are neither big enough to support the number of layoffs attributed to AI, nor to justify the capital expenditures on AI cloud infrastructure. Those expenditures may be approaching $1 trillion for 2025, while AI revenue—which would be used to pay for the use of AI infrastructure to run the software—will not exceed $30 billion this year."
Are the numbers really that bad?
Google has been claiming that their cost per AI search query has dropped by over an order of magnitude.[1] They're presumably reaping the gains of not cranking up a really smart model on dumb questions.
[1] https://arstechnica.com/ai/2025/08/google-says-it-dropped-th...