SignalFire data reveals engineering resilience despite AI layoff narratives
While total recruitment at major technology firms has contracted, engineers accounted for 55% of new hires in 2025, up from 46% in 2019.
New data from venture capital firm SignalFire challenges the prevailing narrative that artificial intelligence is rapidly eliminating engineering roles. Analysis of hiring trends in 2025 indicates that engineering positions were the most resilient job function within the technology sector, contradicting fears that AI-driven automation would lead to widespread job losses in the field.
While total hiring at large technology companies decreased by 25% compared to 2019 levels, engineering roles experienced a significantly smaller decline of just 11%. Engineers comprised 55% of all new hires across 12 "Tech Major" companies in 2025, a notable increase from 46% in 2019. The report, titled the State of Talent Report, tracked the careers of millions of employees across more than 80 million companies to derive these findings.
SignalFire researchers argue that hiring metrics offer a more accurate reflection of workforce trends than layoff figures, which are often driven by short-term efficiency adjustments and delayed reporting. Asher Bantock, SignalFire’s head of research, noted that while layoffs are frequently attributed to AI efficiency, the hiring data presents an inconsistent picture with that rationale. Bantock stated that if AI were truly substituting for engineering talent, engineering hiring would be the first to fall amid the current tech hiring contraction.
The continued demand for technical talent was even more evident at early-stage startups, which collectively increased their engineering hiring by 7% in 2025 compared to 2019 levels. This growth suggests that engineering headcount is expanding faster than most other job functions in the technology sector, despite broader industry consolidation.
Industry leaders have also rejected the notion that AI will replace engineers, suggesting instead that AI tools increase productivity and demand for engineering talent. Nvidia CEO Jensen Huang stated in April that software engineers are "busier than ever" due to the adoption of agentic AI, arguing that AI agents push engineers to generate "the next idea" rather than replacing them. This dynamic aligns with the Jevons paradox, where increased efficiency leads to expanded work capacity and higher demand for talent.
Peter McCrory, head of economics at Anthropic, told TechCrunch in March that he had not yet observed significant AI-driven effects on unemployment rates. He noted there was no material difference between workers using AI for central tasks and those in jobs requiring physical interaction, further supporting the view that the workforce impact of AI is more nuanced than initial layoff narratives suggest.
