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Thousands of Software Engineers Say the Job Market Is Getting Much Worse (www.vice.com)

submitted 10 months ago by [email protected] to c/[email protected]

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Thousands of Software Engineers Say the Job Market Is Getting Much Worse::9,388 engineers polled by Motherboard and Blind said AI will lead to less hiring. Only 6% were confident they'd get another job with the same pay.

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[–] [email protected] 15 points 10 months ago (4 children)

The 2017 tax bill that the Republicans rammed through had a time bomb in it for software developers. Starting in 2022, companies could no longer expense R&D costs, and instead had to amortize them over 5 years. This has led to massive tax bills in 2023 for companies. I have no doubt that this is another major factor in the recent tech layoffs.

Take an imaginary bootstrapped software business called “Acme Corp.” This company generates $1,000,000 of revenue per year running a SaaS service. It employs five engineers, and pays each $200,000. That is $1,000,000 paid in labor costs. For simplicity, we omit other costs like servers and hosting, even though those costs can also fall under the new R&D rules, and have to be amortized. So, how much taxable profit does this company make?

In 2021, the answer would be zero profit. In 2022, the answer was $900,000 in profits(!!)

https://newsletter.pragmaticengineer.com/p/the-pulse-will-us-companies-hire

[–] [email protected] 6 points 10 months ago (3 children)

That doesn't make sense because salaries are a current expense, not a capital expense to be amortized. And why 5 years? The work a software engineer does may be outdated in a year or two. Only certain legacy applications are around for 5 years.

The amortization time period is supposed to match the usefulness of the item purchased. Basically, software engineers are an ongoing expense, not R&D.

[–] [email protected] 7 points 10 months ago (2 children)

Only certain legacy applications are around for 5 years.

Oh if that were true.

[–] [email protected] 2 points 10 months ago

Those are the legacy applications. This is the survivor bias 100%. You don't see all the projects that were created and then dumped after a year or two (see Google).

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