2.3. Why There Are No Entry-Level Jobs

The tech industry recently gone through significant waves of layoffs resulted in more senior developers competing for the same entry-level roles aswell as making it harder to justify hiring interns and entry-level developers.

Pandemic and User Growth

Let's look at the recent history of the tech industry to understand what lead to the layoffs.

As pandemic lock downs took effect, demand for digital services skyrocketed. Remote work, online education, and e-commerce became essential, leading to an unprecedented surge in user growth for tech companies.

This lead to a massive spike in new developer jobs in 2021-2022 as companies tried to raise headcount to meet newly projected growth.

However, as the world returned to normal, the industry faced mass layoffs and ushered in a period marked by a significant decline in new developer job postings.

The following is a graph showing new developer postings on Indeed:

Growth > Profit

A subset of the tech industry is intrenched in a culture of growth at all costs, many of which prioritize rapid expansion over sustainable profitability.

Examples like Netflix, which take on massive debt to churn out original content, and Uber, which operate at a loss to undercut competition and gain market dominance, exemplify this strategy.

As pandemic lock downs took effect, demand for digital services skyrocketed.

At the same time, central banks worldwide slashed interest rates to near-zero levels in an effort to stabilize the economy. This made borrowing cheaper, fueling a wave of investment in the tech industry.

To meet the demand of the newly projected pandemic growth, companies started aggressively hiring using the cheap capital available to them.

However, once the pandemic waned, user growth began to decline and interest rates rose faster than the industry expected; leading to the tech sector facing a stark reversal.

Companies with shrinking margins or burdened by massive debt were suddenly forced to cut costs, leading to widespread layoffs as the focus shifted from growth to survival.

Impact of Mass Layoffs on Young Professionals

As industry giants cut tens of thousands of jobs, many of these displaced workers—often seasoned and highly skilled—shift their focus to smaller tech firms, startups, and mid-sized companies.

Traditionally, smaller companies have been a fertile ground for entry-level opportunities. However, with the influx of experienced professionals seeking new roles, these positions are now being filled by candidates with years of experience, leaving fewer opportunities for recent graduates.

In this period of low developer demand, seasoned professionals are willing to accept lower pay or junior titles to remain employed, further diminishing the chances for new graduates to secure their first job.

Additionally, in a world with so many full-time layoffs, it’s extremely difficult for companies to justify hiring interns.

Internships are often seen as a way to build a pipeline of future talent, but due to economic uncertainty, companies are prioritizing immediate survival over long-term planning.

This further narrows the path for students and recent graduates, who rely on internships as a critical step toward securing full-time employment.

AI’s Impact on Entry-Level Jobs

The reality is that AI does not fully replace developers—at least, not yet.

Today, AI is simple a tool that saves developers time, kind of like how a calculator saves time in performing complex calculations. According to the 2024 Stack Overflow survey, 81% of developers agree that AI significantly boosts productivity.

Although it does not fully replace the duties of an entry level developer, it is able to generate code that could have previously been delegated to interns or new grad level employees.

While AI isn’t replicating the exact work developers do, its ability to enhance efficiency means that if developers become x% more productive with AI, companies may start considering reducing their developer headcount by a similar margin.

Ex: If every developer is now 20% more productive with AI, then a team of 4 can now do the work of a team of 5.