A Tale of Two Markets
On the surface, the tech job market looks like a paradox.
On one side: traditional full-stack developer roles disappearing, applications stacking up, and frustrated engineers struggling to land interviews.
On the other: a hiring boom in AI and other high-demand specializations, with salaries climbing and roles going unfilled.
This isn’t just a market shift, it’s a market split.
The old pathways into software engineering are narrowing, while entirely new ones are widening faster than many engineers can pivot.
The Squeeze On Traditional Roles
The numbers tell a clear story. Since 2015, more than 177,000 software engineers have entered the U.S. market through degrees, bootcamps, and self-taught routes (BLS). But since 2020, demand for traditional software engineering roles has dropped by one-third.
Layer on the 300,000+ tech layoffs since 2022, with 42% coming from FAANG companies alone, and you get an intense competition dynamic: senior engineers applying for mid-level jobs, juniors competing with automation, and entry-level opportunities disappearing. What’s gone quiet is the fact that the market itself hasn’t shrunk; it’s shifted.
AI: The Fast Lane
For engineers fluent in AI and ML, the hiring landscape is almost unrecognizable compared to their generalist peers. AI Engineer job postings are up 143% since May 2024. AI roles overall have grown 38% since 2019, expanding over three times faster than the average job.
The velocity of change here is staggering. Skills requirements in AI are evolving 25% faster than in any other tech sector. Microsoft data indicates that 2025’s top in-demand roles will include AI trainer, AI data specialist, and AI security specialist.
This isn’t hype, it’s math. The BLS projects a 17% growth in software roles by 2033, mostly in AI and ML.
And the growth isn’t just in Silicon Valley; industries like retail and healthcare are building AI teams to drive productivity and defend against cyberattacks. Today, more tech workers are employed outside the tech sector than inside it.
Cybersecurity and Cloud: The Parallel Surge
If AI is the new engine, cybersecurity is the armor.
With 94% of businesses using cloud services now vulnerable to cybercrime, demand for cybersecurity talent is outpacing supply.
From May 2024 to April 2025, 514,359 cybersecurity jobs were posted in the U.S.
But, there are only 74 qualified candidates for every 100 roles. While globally, 3.5 million cybersecurity jobs remain unfilled.
AI is reshaping this field too: 40% of cybersecurity skills didn’t exist three years ago, and half of today’s specialized training modules will disappear from entry-level positions within a few years as AI-enabled defenses take over simpler tasks.
What This Means for Engineers
We’re not in an oversaturated market. We’re in a divided market.
On one side: shrinking opportunities for traditional devs.
On the other: explosive growth for engineers who can wield and strategically direct AI, ML, cybersecurity, and cloud technologies.
The most sought-after engineers now aren’t just coders; they’re strategists. They know which tools to invest in, how to upskill teams, and how to deploy AI to create product advantages.
Your Move
If you want to future-proof your career:
- Upskill in AI, ML, cybersecurity, and cloud.
- Show strategic impact, not just technical ability. Employers want leaders who can communicate the “why” of a tech direction as clearly as the “how.”
- Work where the growth is. These roles are expanding faster than the talent pipeline, a gap that ambitious engineers can turn into an opportunity. Codesmith alumni have been seizing this shift since 2023, moving into AI leadership roles and specialized cybersecurity positions. Programs like the AI & ML Technical Leadership program are designed to help engineers not only join this wave but lead it.
The split in the tech job market isn’t a threat. It’s a map. Learn to read it, and you’ll find yourself on the side that’s growing.