If a startup is laying off engineers then it’s dead in the water. That means it’s not growing and focused on cost cutting at the expense of velocity. Thats what a large company does. The issue isn’t AI but the startup fundamentally being broken and this being a last gasp for air before it dies.
Yeah what a lot of people are missing here is tons of small startups are laying people off, but it's not because they don't need engineers, it's because they are out of runway because their entire vertical (usually some sort of SaaS, often b2b SaaS) is basically now nonexistent. Traditionally businesses favored buying software over building it for cost reasons. Now they can cheaply build exactly what they want instead of paying through the teeth for something that is only slightly like what they want. This doesn't mean the work is gone, but it does largely mean large swathes of the SaaS vertical will be gone. The work itself is shifting to the individual businesses that were once the customers of the SaaS.
SWEs will be fine, all these small VC-funded startups building another CRUD app will not.
I work for a startup that makes a b2b SaaS that is _way_ too complex for anyone to spec out in a markdown file, especially when taking things like ITAR compliance into consideration.
We have seen steady growth and there’s been no signs of slowing down.
Our software facilitates order/quote/factory floor workflow automation with auditable trails in the manufacturing space, with cad file analysis and complex procedural pricing equations for quote generation, alongside a Shopify style storefront and many more goodies. We interface with things like shipping, taxes, erp integrations, and so much more.
I don’t see anyone vibe coding an alternative to our software even if they could. Manufacturers have enough on their plate managing their factory floors.
That said, we facilitate $millions in manufacturing orders per week and our engineering team is 3 people. We couldn’t do what we do without AI, and we would have needed to hire more engineers to handle the scale of our business if it weren’t for the power of Claude Code and Cursor.
A poster-child startup is one that has a long waitlist of willing future customers, and whose engineering team is scaling the tech up, up, up to keep up with the demand.
No, it's "if you already have engineers that know your stack and customers and business then getting rid of them to save a bit of short term cash is stupid unless you're out of runway because of bad business decisions." That is a tangential point to hiring more engineers. You may slow down the rate or hiring however the ROI for getting rid of them in a growing startup is silly imho. A collapsing startup is a different beast.
