For most of the last decade, being a software engineer has been a lot of fun. Every company offered lots of perks, layoffs and firings were almost unheard of, and in general, they treated us as special little geniuses who needed pampering so we could work our magic. That has changed in the last two years. That has changed in the last two years. The first round of tech layoffs in 2023 came as a shock, but at least companies were falling over themselves to offer generous severance and teary CEO letters regretting the necessity. Two years later, Meta is explicitly branding its layoffs as “these were our lowest performers, good riddance”. What the hell happened?1 What does it mean for us?
Why did the vibe shift?
In the 2010s, interest rates were zero or close to zero2. Investors could thus borrow a lot of money.
Investors spent much of that money on tech companies, hoping for outsized returns. This incentivized tech companies to:
- (a) accelerate recruitment efforts, and
- (b) pursue a lot of low-risk, high-reward opportunities,
even if that ends up wasting money. Tech companies definitely did not have to be profitable. In fact, they didn’t even need to make money – they just had to acquire users, or at least hype, to drive up the valuation of the company itself. So, in that environment, throwing money at their software engineers (in the form of paid trips, in-house chefs, and huge comp packages) was a sensible business decision.
In 2023, this underlying economic situation reversed: interest rates went up to around 5%3. Tech company incentives completely flipped: now it’s suddenly important to be profitable, or at least to make lots of money. That means it’s not wise for most companies to accelerate recruitment efforts, or to continue throwing near-unlimited amounts of money at their software engineers.
I think that’s a sufficient explanation for the vibe shift all by itself. What about COVID? It helped, but it wasn’t the root cause. Two years (or thereabouts) of people staying inside more meant much more engagement with tech products, which meant much more money flowing into tech companies. Everyone was hiring during COVID. Once that short-term boom finished, companies naturally wanted to get rid of some of those engineers, which is what triggered a lot of the initial layoffs. However, I do think that even without COVID, we’d still be in something like the current situation. Companies were constantly hiring pre-2020 as well.
This idea that AI is taking software engineering jobs or contributing to layoffs is – as far as I can tell – currently pure fantasy. I believe in the power of AI, and I wouldn’t be surprised if it eventually takes software jobs. However, it is certainly not responsible for the current vibe shift in software engineering.
What does that mean for us?
I think a lot of software engineers right now are planting their feet and refusing to change. After ten years of having their opinions consulted on big company decisions, they’re trying to hold on to that power. I respect anyone who stands up for what they think is right, even at personal cost. I just want to stress that there will be a personal cost for not going along with the vibe shift, especially for more junior or vulnerable engineers. As someone who lives in Australia, I feel pretty vulnerable myself.
The biggest thing to internalize is that companies now are actually trying to focus. In 2015, there was a lot of appetite to do everything at the same time:
- building out new product lines,
- transitioning from a product to a platform,
- making significant open-source contributions,
- working on a top-tier developer experience,
- and so on.
In 2025, the company abruptly defunds most of these initiatives to put more resources into a handful of bets that the executives truly care about.
During the 2010s, it was as if companies were their software engineers, and were interested in the same things as their engineers were. A lot of engineers were fooled by this into identifying strongly with their employer. But this was a mirage: in part caused by companies’ desire to attract and retain talent, and in part by there being no real pressure on companies to say no to anything. Now the mirage has vanished. Companies are their executive leadership, and their executive leadership are interested in a much smaller set of things.
If you were an engineer who loved working on your company’s open-source libraries, it’s probably sensible to confront the fact that the company never really cared about it that much. When interest rates were zero, it was worth doing because most things were worth doing. At 5% interest rates, most open-source work doesn’t meet that bar. In other words, your interests now conflict with your company’s interests.
It’s okay for your interests to conflict with your company’s. You get to decide what you care about, and what you’re willing to fight for. But when you act in ways that don’t further your company’s interests, your company may see you as ineffective or unreliable. In 2025, that makes you vulnerable to layoffs.
Is there a silver lining?
The good news is that tech companies now live in (or at least a lot closer to) the “real world”. It felt nice to receive pampering, but it felt fundamentally ridiculous, even at the time. I know a lot of engineers who found that offputting, including myself. It’s why many engineers found the TV show Silicon Valley hard to watch – the satire was too real to laugh at. It was mainly embarrassing.
If I had to choose, I’d definitely choose to return to the job market of the 2010s so that companies would pay me more to work less and provide greater job security. I’m not an idiot. But the silver lining to actually having to ship is that you’re no longer living in a dream. If you’re realistic about how things work, the job of software engineering becomes much easier to understand:
- Providing value to the company gets you rewarded
- Not providing value to the company gets you punished
- “Value to the company” means furthering the explicit plans of your company’s executives
It’s not much of a mission statement! Certainly nothing on “making the world a better place”. But it has the comforting solidity of the truth. The good thing about the music finally stopping is that you don’t have to worry about when it’s going to stop.
- I wrote this post because I had a conversation with some engineer friends who were commenting on the vibe shift, and then the next morning read Will Larson’s advice to engineering leaders.
- This was a more-or-less intentional decision to aid recovery from the 2008 crash.
- Likely as an intentional decision to combat runaway inflation (but at this point it’s very much not my field).
Source: Sean Goedecke
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