📢 NEW essay: the narrative that AI is replacing software engineers seems to be based on AI-washing of layoffs. Among the many lines of evidence: New York State requires firms to disclose which layoffs were due to AI. When there are legal consequences to lying, almost no company blames AI.

The best data suggests that software engineer employment in the U.S. is still growing, though slightly more slowly compared to a no-AI counterfactual world. But even this doesn’t account for increased entry into entrepreneurship.

Why haven’t AI agents replaced software engineers? Many kinds of knowledge work, including software development, can be seen as a “decide-execute-deliver sandwich”. AI compresses the middle but the other two layers resist automation in a way that will not be overcome by capability improvements alone. In 2026, the middle has already been squeezed and there isn’t much room for further compression, so there isn’t a future capability leap that will cause discontinuous impacts, either.

The essay also has a detailed breakdown of the difference between vibe coding and agentic engineering. Conflating the two has unfortunately led to a lot of confusion.

We acknowledge that there’s a lot of uncertainty about the future. But we think the unknowns are more about how we will define and carve up roles and who can adapt to the changing needs, and less about whether software engineering skills and judgment will remain in demand (they will).

Given that the AI-capabilities-cause-mass-layoffs narrative seems to be false even in a sector with very few regulatory barriers, we think most other professions are likely to be even more cushioned. (The claim isn’t that automation never displaces jobs, but that there are many downstream links in the causal chain, and that we have collective agency to act on those downstream decision points to ensure better outcomes for workers.)

This essay by me and @sayashk is the first in a series. Feedback is welcome! We hope that our unique vantage point (leading an AI agent evals research group + fluency with the labor economics literature + the "normal technology" framework for understanding AI impacts + being coders ourselves and well connected to the software engineering community) gives us a way to bring complementary perspectives together for a deep dive into how AI is transforming the profession, in a way that hasn't been done before.

Read the essay here for lots of other details: https://www.normaltech.ai/p/why-ai-hasnt-replaced-software-engineers