He worked at Big Tech. He worries that half of the company’s software engineers are now on the brink.
Steve Yegge worked with Jeff Bezos in the early days of Amazon. He then joined Google, where he worked for over 12 years and earned the title of Senior Staff Software Engineer. He also has some knowledge of AI engineering and has written a book on the subject called “Vibe Coding.”
In his podcast “The Pragmatic Engineer” and newsletter, Yegge laid out hypothetical numbers ranging from 0 to 100 for the percentage of engineering staff that a company could lay off. He said he believes that in the age of AI, that number will be set at 50.
“You have to remove half of them to maximize the productivity of the other half,” says Jägge. “We’re going to lose about half of our engineers from large companies. That’s scary.”
There is a trade-off between capital and labor in the technology industry. Businesses are paying huge amounts for tokens, enterprise AI licenses, GPUs, and computing power. That money has to come from somewhere, and some may come from payroll.
Yegge pointed to this tradeoff as the reason for his prediction that 50% reductions will become the norm. He said companies will lay off some engineers to cover the costs of ensuring others have proper access to AI.
Host Gergely Orosz said the 50% cut would be higher than during the COVID-19 pandemic, when the tech industry went through an intense layoff cycle.
“It’s going to be bigger,” Jaegge said. “It’s going to be a big deal.”
They’re not the only ones mentioning the pandemic. In a popular article for X, Matt Schumer, CEO of HyperWrite, wrote that the impact of AI on jobs will be “much bigger than COVID-19.”
In recent years, the issue of AI-driven layoffs has plagued workers at Big Tech companies, many of which made mass hiring during the pandemic. While it’s often impossible to pinpoint a single reason for job losses, many suspect that AI-enabled productivity gains and rising capital spending are driving layoffs. Some business leaders explicitly mention AI when announcing layoffs.
Meanwhile, technology leaders say smaller teams work more efficiently. During a recent earnings call, Meta CEO Mark Zuckerberg said that AI allows one engineer to do the work of an entire team.
As AI productivity increases, so too do complaints about AI fatigue. Siddhant Khare, a software engineer, wrote a long essay about how he feels more drained than ever, even as his productivity increases. He told Business Insider that he feels more like a “reviewer” than an engineer.
Yegge said it’s not all bad news for engineers, just those who want to work for big companies. He said engineers who “saw the light” are now coming together, leaving their companies and creating startups that outperform industry giants.
“We have a tremendous rush of innovation from the bottom up,” he said. “And knowledge workers are being laid off by large companies because clearly large companies are no longer the right size.”
