He worked in Big Tech. Now, he fears half of its software engineers are on the chopping block.
Steve Yegge worked with Jeff Bezos in Amazon’s early years. Then he went to Google, where he worked for over 12 years and earned the title of senior staff software engineer. He also knows a thing or two about AI engineering, having written a book on the topic titled “Vibe Coding.”
On “The Pragmatic Engineer” podcast and newsletter, Yegge described an imaginary dial of the percentage of engineering staff a company can lay off, ranging from zero to 100. He said he believes the dial is being set at 50 in the age of AI.
“You’re going to have to get rid of half of them to make the other half maximally productive,” Yegge said. “We’re going to lose around half the engineers from big companies, which is scary”.
There’s a capital-to-labor tradeoff happening in tech. Companies are paying vast sums for tokens and enterprise AI licenses, GPUs, and computing capacity. That money needs to come from somewhere — and for some, it could come from labor costs.
Yegge pointed to this tradeoff as the reason for his forecast of 50% cuts becoming the norm. Companies will lay off some engineers to help pay for the others to have adequate access to AI, he said.
Host Gergely Orosz said that 50% cuts would be more than during the COVID-19 pandemic, when tech went through an intense layoff cycle.
“It’s going to be way bigger,” Yegge said. “It’s going to be awful.”
They aren’t the only ones referencing the pandemic. In a popular X article, HyperWrite CEO Matt Shumer wrote that AI’s impact on work would be “much, much bigger than Covid.”
In recent years, the question of AI-driven layoffs has haunted workers at Big Tech companies, many of which went on a hiring spree during the pandemic. While it’s often impossible to boil job loss down a single reason, many suspect productivity gains from AI and ballooning capex spending are fueling the cuts. Some business leaders have also explicitly cited AI when announcing layoffs.
Meanwhile, tech leaders describe smaller teams working more efficiently. On a recent earnings call, Meta CEO Mark Zuckerberg said one engineer could now do the work of a whole team, thanks to AI.
As AI productivity grows, so have complaints of AI fatigue. Software engineer Siddhant Khare penned a lengthy essay about growing more productive, but also feeling more drained than ever. He told Business Insider that he felt like a “reviewer” as opposed to an engineer.
Yegge said it’s not all bad news for the engineers — just those who want to work at a big company. Engineers who have “seen the light” are now getting together, leaving their companies, and creating startups that outpace the industry’s giants, he said.
“We’ve got this mad rush of innovation coming up, bottom up,” he said. “And we’ve got knowledge workers being laid off by big companies because clearly big businesses are not the right size anymore.”
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