2025 Survival Guide for Software Engineers: AI, Layoffs, and New Opportunities
500k+ engineers laid off, AI reducing dev headcount, global talent competition rising. 5 strategies to thrive: AI-native workflow, location optimization, side hustles, networking, career strategy.
The software engineering market is currently undergoing MAJOR changes.
This isn't doom and gloom—but it is a wake-up call. The strategies that worked in 2019-2021 won't work in 2025.
Here's my analysis of what's happening and well-researched strategies to thrive.
Browse current opportunities →
The Problems
Let's be honest about the challenges:
| Challenge | Impact | Who's Most Affected |
|---|---|---|
| Big tech not expanding | Fewer new roles | Entry-level, generalists |
| 500k+ layoffs (2 years) | Market flooded with talent | Mid-level in saturated areas |
| AI reducing dev headcount | Fewer devs needed per project | Routine coding roles |
| Global talent competition | Companies hiring worldwide | High-cost location devs |
| Record CS graduates | Supply exceeds demand | New grads |
For devs in high-cost locations (SF, NYC, London, Munich), this means:
⚔️ Fierce competition
🥴 Fewer jobs
😵 Stagnant pay
The Market Reality by the Numbers
| Metric | 2021 Peak | 2024-2025 | Change |
|---|---|---|---|
| Open tech roles (US) | 500k+ | ~250k | -50% |
| Average time to hire | 2-3 weeks | 6-10 weeks | +200% |
| Applications per role | 50-100 | 300-500+ | +400% |
| Salary growth YoY | 10-15% | 0-3% | -80% |
| Remote roles available | Peak supply | Reduced | -30% |
The market has fundamentally shifted from employer desperation to employer selectivity.
The Opportunities for Those Who Adapt
That said... there are several opportunities for those who can adapt 💪
The engineers who are thriving right now share common traits: they're adaptable, strategic, and proactive.
1. Become AI-Native
Companies need fewer devs, but those who integrate AI into their workflow are far more valuable.
| AI Skill | Impact on Productivity | Salary Premium |
|---|---|---|
| Code completion (Copilot, Cursor) | 20-30% faster | Table stakes |
| AI-assisted debugging | 40% faster bug fixes | +10-15% |
| Prompt engineering for development | 2x output | +15-20% |
| Building AI features | High demand | +25-40% |
| AI/ML system integration | Critical skill | +30-50% |
Practical steps:
- Master AI coding assistants in your daily workflow
- Learn to prompt engineer effectively for complex tasks
- Understand when AI helps vs. when it misleads
- Stay current on AI tooling—it changes monthly
- Build something using AI APIs (OpenAI, Claude, etc.)
The engineers who embrace AI multiply their output. Those who resist become comparatively less productive.
2. Optimize Your Location Strategy
If your city isn't serving you, consider relocating to a lower-tax, lower-cost location with more opportunities and less financial pressure.
| Location Strategy | Tax Impact | Cost Savings | Net Benefit |
|---|---|---|---|
| Stay in SF/London | 40-50% tax | High costs | Baseline |
| Move to Berlin/Amsterdam | 35-42% tax | Medium costs | +15-20% |
| Move to Lisbon/Barcelona | 20-30% tax | Lower costs | +40-50% |
| Move to Warsaw/Prague | 12-23% tax | Low costs | +60-80% |
| Remote from LCLT country | 12-20% tax | Very low costs | +80-100% |
I've written extensively about this strategy:
- Why Poland is Europe's top destination for devs
- Best low-cost, low-tax countries for remote developers
- The LCLT remote work strategy
Use the savings calculator to model your specific situation.
3. Build a Side Hustle
With AI, it's easier than ever to build independent income streams.
| Side Hustle Type | Time to First Revenue | Income Potential | Risk Level |
|---|---|---|---|
| Freelancing/Consulting | 1-3 months | €50-200/hour | Low |
| Micro-SaaS | 3-6 months | €1k-20k/month | Medium |
| Technical content | 6-12 months | €500-5k/month | Low |
| Course creation | 3-6 months | €2k-50k/launch | Medium |
| Open source sponsorship | 12+ months | €500-10k/month | Variable |
Why this matters in 2025:
- Layoff insurance (income doesn't go to zero)
- Skill development outside your day job
- Potential escape from employment entirely
- Network building through visibility
4. Create Content and Grow Your Network
Social media, if leveraged correctly, is a huge enabler for getting quality jobs, clients, and opportunities in general.
Platform strategy:
| Platform | Best For | Time Investment | Payoff Timeline |
|---|---|---|---|
| Job opportunities, B2B | 2-3 hours/week | 3-6 months | |
| Twitter/X | Tech community, startups | 3-5 hours/week | 6-12 months |
| YouTube | Authority building | 5-10 hours/week | 12-24 months |
| Newsletter | Owned audience | 3-5 hours/week | 6-12 months |
| GitHub | Technical credibility | Ongoing | 6-12 months |
What to share:
- Technical learnings and tutorials
- Career insights and market observations
- Project showcases and case studies
- Thoughtful takes on industry trends
Read more about leveraging LinkedIn for tech careers.
5. Double Down on Career Strategy
In 2025, you can't expect to just graduate from a CS degree and have people beg you to join them.
You need to be intentional and professional in your career strategy.
| Strategy Element | What It Means | Resources |
|---|---|---|
| Target company research | Know exactly which 20-30 companies you want | Job board |
| Skills gap analysis | Identify what's missing for target roles | Career guides |
| Interview preparation | Systematic practice, not cramming | Big tech interview guide |
| Salary benchmarking | Know your market value precisely | Financial data |
| Personal branding | Stand out from 500 applicants | LinkedIn strategy |
| Network cultivation | Referrals beat cold applications 10:1 | Active effort required |
I've also covered intentionality as the #1 trait for career success and the Skills Pattern Analysis framework.
The Market Isn't Easy, But Opportunities Exist
The engineers who will thrive in 2025 and beyond are:
✅ AI-augmented: Using tools to multiply their output
✅ Location-optimized: Not overpaying in taxes and cost of living
✅ Diversified: Building income streams beyond their day job
✅ Visible: Known in their niche through content and networking
✅ Strategic: Playing the long game, not just applying randomly
The market has changed. The question is: will you adapt?
Action Plan: Your Next 30 Days
Week 1: Assessment
- Audit your current AI tool usage (are you maximizing it?)
- Calculate your effective tax rate and savings potential
- Identify 3 side hustle ideas that match your skills
Week 2: Foundation
- Set up your LinkedIn for discoverability
- Research 20 target companies using the job board
- Start using AI coding assistants daily if not already
Week 3: Action
- Begin one side project (even if small)
- Post your first piece of content on LinkedIn
- Reach out to 5 people at target companies
Week 4: Momentum
- Continue daily AI integration
- Research location optimization options
- Apply to 5-10 roles at target companies
You just need to play the game differently.
Frequently Asked Questions
Is software engineering still a good career choice in 2025?
Absolutely, but with caveats. Software engineering remains one of the highest-paying, most flexible careers available. However, the "easy mode" era (2015-2021) is over. You now need to be more strategic: specialize in high-demand areas, build a personal brand, optimize your location for taxes and cost of living, and continuously adapt to AI tooling. The ceiling is still very high ($200k-$500k+), but reaching it requires more intentionality than before. For new grads, expect a tougher first job search but still better long-term prospects than most careers.
How will AI actually impact software engineering jobs?
AI is changing the job, not eliminating it. What's happening: routine coding tasks are being automated (boilerplate, simple CRUD, basic debugging). What's not changing: system design, understanding complex business requirements, debugging edge cases, architectural decisions, and human collaboration. The ratio of engineers to output is shifting—companies can now ship more with fewer devs. This means fewer entry-level roles but higher value (and pay) for senior engineers who leverage AI effectively. Learn to use AI as a 10x multiplier, not as a threat.
Should I relocate to a lower-cost country even if I have a good job now?
Depends on your priorities. If you're saving 40%+ of your income, your current location may be fine. But if you're in a high-tax country (Germany, UK, Netherlands) saving only 10-20%, relocation could 2-3x your wealth building. Consider: Can you go remote with current employer? What's your 5-year wealth goal? Do you value current location's lifestyle? Many engineers relocate to Poland, Portugal, or Spain after realizing they could retire 10+ years earlier by optimizing location. Run the numbers using the financial calculator before deciding.
What side hustle has the best ROI for software engineers?
Freelancing/consulting has the fastest path to income—you can bill €50-200/hour for skills you already have. Start on platforms like Toptal, Lemon.io, or direct client work. Micro-SaaS has highest ceiling (€10k+/month passive) but requires 3-6 months to validate and build. Technical content (YouTube, newsletter, courses) builds long-term assets but takes 6-12+ months to monetize meaningfully. Best strategy: start with consulting (immediate income), then reinvest time/money into SaaS or content (long-term leverage). Your day job skills are directly applicable—don't try to learn a completely new domain.
How do I compete when there are 500+ applicants per role?
Stop applying like everyone else. Most applicants send generic resumes through job board "Apply" buttons. Instead: (1) Get referrals—they bypass 90% of competition. (2) Target smaller companies (20-200 employees) where you're not competing with 500 people. (3) Apply directly on company websites, not aggregators. (4) Build public presence so recruiters find you. (5) Follow up personally with hiring managers on LinkedIn. The funnel: 100 cold applications might yield 2-3 offers. But 20 referral-based applications can yield the same. Focus on quality and relationships over volume.
What's the most important skill to develop in 2025?
Becoming "AI-native" in your development workflow. This isn't optional anymore—it's table stakes. Engineers who effectively use AI assistants (Copilot, Cursor, Claude) are measurably 30-50% more productive. Beyond productivity: understanding how to build with AI (integrating LLM APIs, prompt engineering for features, AI-assisted testing) will be a key differentiator. Companies are looking for engineers who can ship AI-powered features, not just traditional CRUD apps. Spend 2-3 months mastering AI tools, then add it explicitly to your resume and interview talking points.