No, AI hasn’t replaced Australian tech jobs yet

Minister for Employment and Workplace Relations, Amanda Rishworth — in a supposedly reassuring Department of Employment and Workplace Relations report on the impact of AI — recently said: “Artificial intelligence is not currently causing upheaval in the labour market,”

It is a statement as calming as a pilot announcing to the cabin that the plane “is not currently losing altitude”. But the report does go on to offer an effective counter to AI job replacement fears.

The report notes that employment in the occupations most exposed to AI risk grew just 5.6% between November 2022 and February 2026. This is significantly lower than the least-exposed occupations (9.5%), but we can’t directly attribute the blame to AI: many of these occupations were already shrinking prior to 2022.

Perhaps the most striking finding in the report is the impact of AI on tech jobs. It notes that employment in Australian software development roles has increased by 25% since November 2022. We came to the same independent conclusion in our recent analysis of ABS labour force stats.

Software development is not shrinking. In fact, it continues to be one of the fastest growing careers in Australia since the emergence of ChatGPT. I believe that we are entering a golden era for developers. Here’s why.

SaaSpocalypse now

A lot of the doom and gloom around tech job layoffs centres on the actions of a handful of big SaaS providers, but I think the contraction in SaaS could lead to growth elsewhere.

The economics of building custom software changed completely with the arrival of AI. It was previously accepted that building a custom tech product would cost more than $1 million and require a company to adapt all its processes for the new system. It was easier and cheaper to subscribe to a SaaS provider and pay $100k to $200k per year. Now developers can build apps using Cursor, Claude Code, and Codex. They could produce custom tools for less than the annual cost of their old ones. This trend was dubbed the ‘SaaSpocolyspe’, and the SaaS industry had no choice but to strike back. With share prices plummeting, SaaS companies responded by using AI to justify mass layoffs and cut costs.

Every software developer rightfully feared for their job, but there’s growing evidence that these roles are being displaced, not replaced by AI. Dev demand is naturally growing elsewhere.

A post-SaaSpocalypse future

As resources get cheaper or more efficient, demand for them increases — and software development is no different. Medium and large companies will drop their SaaS subscriptions to start developing technology for themselves at an even faster rate than they are already. To do so, they will need to hire internal development capability.

Demand for AI-powered software developers will peak over the next 3–5 years. We may also see some of the biggest SaaS companies row back their AI layoffs to rehire staff that were let go in 2025/26. Some companies cut too hard, too fast, or were unable to realise the efficiency gains they were expecting with AI.

Devs won’t just go back to their old jobs and into SMEs. Incumbent SaaS businesses will face stiff competition from new entrants that have a focus on small businesses that can’t hire a dev team.

My experience

I write the above speaking from experience. This year I have seen custom CRM, ATS, HRIS and payroll management built with a combined cost of under $250k. This kind of timescale and budget would have been impossible two years ago, but time and tech has moved on.

Yes, Atlassian has fired 10% of its workforce, but this is a short-term pain, to be followed by a bigger long-term gain. By 2028, how many Australian businesses will have built their own CRM? How many will be using one built by a small team of AI-augmented coders?

AI has fundamentally changed software development forever. But replaced it? No chance.

*Lambros Photios is Founder and CEO of software consultancy Adaca.

Image credit: iStock.com/Supatman