The Software Engineer Debate Where Okta CEO Defends Demand Amid Layoffs

Okta CEO Todd McKinnon is confident about one thing that the future will need more software engineers, not fewer.

In a recent interview with Business Insider, McKinnon pushed back against the growing belief that generative AI will make engineering jobs obsolete. “People are like, ‘Oh, no, it’s going to replace the software engineer.’ No, it’s not,” he said. “There’s going to be more software engineers in the future than there are today. It’s just the tools are going to be better.”

McKinnon likened today’s AI evolution to the advent of compilers in the 1970s—a foundational shift that simplified programming and drew more people into the field. “We used to write assembly language. Then the compiler came out. Then there were more software engineers, not fewer,” he said.

He believes AI will do the same which is reduce the barrier to entry and allow a broader set of people to build useful software. “You can be someone who can build software that makes people’s lives better with a fraction of the learning curve,” McKinnon noted. In his view, the result will be a net increase in demand for developers, not a replacement.

But if this is where the industry is headed, the present doesn’t look like the beginning of that curve.

The Numbers Don’t Match the Optimism

Hiring data shows a different picture. Job postings for software engineering roles on Indeed are down 35% compared to January 2020. Since mid-2022, demand has dropped more than threefold. Year-over-year, the decline stands at 8%, placing software engineering among the hardest-hit white-collar professions during this period.

McKinnon attributes the slowdown not to obsolescence, but to overhiring and margin pressures. Many public tech companies expanded aggressively in 2021 and 2022, only to face a market shift that prioritized efficiency and profitability. As McKinnon put it: “Just watch the data,” suggesting that hiring will bounce back once the overcorrection plays out.

Still, hiring trends at leading tech firms suggest a more permanent shift in structure—and a growing reliance on AI.

Leaner Teams, Higher Productivity

At Salesforce, engineering productivity has risen 30% due to generative AI tools, according to CEO Marc Benioff. The company doesn’t plan to expand its engineering team this year.

Google has said over 25% of all new code is written by AI, while Microsoft claims GitHub Copilot allows developers to complete tasks in half the time. These tools aren’t just improving efficiency—they’re changing how teams are staffed. Many companies are learning they can meet product goals with fewer hires.

This is the heart of the current divide. McKinnon sees these tools as augmenting developers and expanding the profession. But others are using them to replace headcount at least in the short term.

Two Realities, One Industry

That tension is playing out across the tech landscape. McKinnon argues layoffs at companies like Google and Salesforce are not permanent shifts in strategy, but responses to investor pressure. He remains bullish that developer demand will rebound over time.

Yet the job market hasn’t shown signs of that rebound. Entry-level roles are scarce. Even experienced engineers are competing for fewer opportunities. Companies are actively restructuring teams to be smaller and faster with AI now central to that approach.

And the trend isn’t limited to public firms.

Cuts Across the Board

​In late March 2025, several U.S. tech companies announced significant layoffs, reflecting ongoing restructuring efforts across the industry. Block, the financial technology firm led by Jack Dorsey, laid off 931 employees, including 240 remote workers in California, as part of a strategic move to enhance performance and streamline operations. Niantic, known for developing Pokémon Go, reduced its workforce by 68 positions following a $3.85 billion deal that led to the formation of Niantic Spatial, a new geospatial technology company. Automattic, the parent company of WordPress.com, announced layoffs affecting approximately 16% of its workforce, equating to around 280 employees, aiming to improve productivity and profitability amid increased competition and rapid technological changes. Additionally, 2U, the online education provider that acquired edX in 2021 and filed for Chapter 11 bankruptcy protection in July 2024, initiated further layoffs as part of its restructuring efforts to reduce its $945 million debt. These workforce reductions underscore the challenges and strategic shifts occurring within the tech sector as companies adapt to evolving market conditions.

Fewer engineers. Higher output. More automation.

Will the Market Catch Up to McKinnon’s Vision?

McKinnon’s long-term view is not without merit. Historically, productivity-enhancing tools have led to more, not fewer, jobs. Compilers didn’t eliminate engineers; they created an industry. The same could hold true for AI-assisted development.

So, while McKinnon sees a world where more people can become developers because of AI, the current data points to a different reality: one where companies are embracing AI to do more with less. Just like Shopify CEO Tobi Lütke has made his stance clear: before asking for more headcount or resources, teams must first explain why AI can’t do the job. In a recent internal memo, Lütke called reflexive AI usage a “baseline expectation,” stating that “using AI well is a skill that needs to be carefully learned by… using it a lot.” Effective AI usage is now baked into performance reviews at Shopify, and he believes success depends on combining team ambition with mastery of AI tools.