The Tech Hiring Market in 2025 – Q1 Update

2025 is not the tech job market you remember.

The fevered pace of 2021–2022 is a distant memory. In its place, a new landscape: fewer openings, higher expectations, and a ruthless focus on efficiency.

What the Numbers Say

• Overall tech job postings: 476,000–490,000 open roles across the U.S., with a notable 34% drop in developer listings compared to 2020.

• Unemployment: Up to 3% in Q1 2025 for tech occupations, a tick up from 2% in late 2024, but still below the national average.

• Layoffs: 27,000–30,000 tech job cuts globally in Q1 2025, concentrated in February, led by Microsoft, Salesforce, and smaller restructuring efforts at Amazon and Google.

• Hiring Initiatives: AI, data engineering, and cloud infra are the only areas seeing sustained hiring across mid-market and enterprise firms.

A Segmented Market

• Software Engineers: Hiring cooled for generalist devs, but those with cloud, ML, or infrastructure expertise remain in demand. Median pay for senior devs rose 10–20% in late 2024, suggesting targeted poaching for specific skills.

• Data and AI/ML Roles: Nearly 21% of tech job postings in Q1 2025 specifically required AI/ML skills, up from 16% a year ago. AI engineers with 3+ years’ experience are commanding $200k+ packages, especially in enterprise and mid-market firms modernizing their stacks.

• DevOps and Infrastructure: Average pay for DevOps engineers reached $140,000 in Q1 2025, with senior SREs exceeding $180k in major cities. The push for cloud automation keeps demand high.

The “Hybrid as Default” Era

Remote jobs are dwindling. Only 5–6% of new tech roles are fully remote in early 2025. Hybrid is the new norm... 2–3 days in the office, the rest at home. Amazon and Dell are leading the charge back to full-time office work, citing productivity and “collaborative culture” as justifications.

AI-Enabled Nearshore Engineers: The Ultimate Competitive Edge

The future of software engineering isn’t just AI... it’s AI-powered teams. By combining AI-driven productivity with top-tier remote nearshore engineers, companies unlock exponential efficiency at a 40-60% lower cost, all while collaborating in the same time zone.

✅ AI supercharges senior engineers—faster development, fewer hires needed
✅ Nearshore talent = same time zones—real-time collaboration, no delays
✅ Elite engineering at significant savings—scale smarter, faster, better

Employer Commentary: The Efficiency Playbook

• Microsoft: Cutting middle management, raising engineer-to-manager ratios. Satya Nadella wants to boost output per engineer while reducing managerial layers.

• Meta: Mark Zuckerberg calls mid-level coding roles “expendable” as AI increasingly handles repetitive tasks.

• Salesforce: Marc Benioff reports a 30% productivity gain from AI tools and freezes all developer hiring, focusing instead on AI product teams.

Hiring Process Slows, Bar Gets Higher

• Average time-to-hire: Up to 41 days, with 20+ interviews per candidate not uncommon for senior roles.

• Applicant volumes: Recruiters report 2.7× more applications per role than in 2021, allowing them to be choosier and extend the hiring process.

Compensation: Cooling for Juniors, Spiking for Specialists

• Entry-level dev salaries flat, reflecting an oversupply of junior talent.

• Senior specialists in AI, cloud, and data continue to command strong pay... $200k+ is common in major markets.

• Equity vs. Cash: Startups are offering more equity, less cash, aiming to attract talent with a compelling long-term vision as cash flow tightens.

Where It’s Hot and Where It’s Not

• Hot: AI/ML, DevOps, cloud architecture, cybersecurity.

• Not: Generalist software devs, junior roles, crypto and speculative tech.

Takeaway for Engineering Leaders:

2025 is not about hiring fast – it’s about hiring right. The bar is higher, the process is slower, and the focus is laser-sharp on AI, data, and cloud infra. Engineering leaders need to adjust expectations and adapt hiring strategies to align with this new reality.

Stay tuned... more to come…

Recommended Reads

✔️ The Rise of AI-Skilled Talent: A New Age of Work  (Onward Search)

✔️ Remote Work Isn't Going Away—and Workers Don't Want It to (Shrm)

✔️ How to Develop a Growth Path for Entry-Level Employees (Uschamber)