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.

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.

  • resin85@lemmy.caEnglish
    0·
    10 months ago

    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

    • KevonLooney@lemm.eeEnglish
      0·
      10 months ago

      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 The work a software engineer does may be outdated in a year or two.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.