The software industry is being hit by three separate developments.
First, many startups were created, and many large companies over-hired, during the pandemic stimulus bo-m. When bo-m changed to bust, these companies laid off. Many of these laid-off people are still looking for work, and at some companies, layoffs are still ongoing.
Second, AI is able to do some of the tasks of a junior programmer. Where companies formerly needed one senior and two juniors, they may get by with one senior, one junior, and an AI. When companies can eliminate the cost of a salaried employee, they certainly will.
Third, outsourcing is a long-term trend that has never stopped. Did everyone notice when SAS Retail developers were laid off in Cary, but retained in India? There is no significant difference between manufacturing steel, automobiles, or software. They’re all manufacturing, and it’s cheaper to manufacture overseas.
The first of these developments is temporary; the laid-off people will work their way through the economy (some of them in different fields). But the other two indeed represent a “giant, permanent shift in the labor market”.
Good luck to all.