For years, software developers on H-1B visas benefited from steady demand among US technology employers. That market is becoming more selective as companies redirect spending toward AI and rely more heavily on coding assistants.

Recent layoffs at companies including Meta and Amazon have added to the uncertainty, with engineering and software roles affected even as major technology companies continue to deepen investments in AI.

Developers and analysts say traditional engineering roles are becoming harder to land, recruiters are asking more often for AI-related experience, and workers are being pushed to keep pace with tools such as GitHub Copilot, Claude, and ChatGPT.

The shift is being driven by both AI investment and broader economic uncertainty, according to Pareekh Jain, CEO of Pareekh Consulting. Companies are changing the profile of the developers they want, hiring fewer people in some areas while paying more for AI talent.

“AI investments are changing company hiring strategy,” Jain said. “They require a different profile, fewer numbers, and also across geographies.”

This shift is colliding with a tougher sponsorship environment for H-1B developers.

Jain said companies are more selective about hiring visa-dependent workers than they were two or three years ago, especially when permanent residents and US citizens are more available in the market.

“Companies are not looking for H-1B now,” Jain said. “They are building a local workforce and preferring green card holders and citizens.”

Employers may now be more likely to consider H-1B candidates only when they have immediate project needs, rather than building a longer-term bench of visa-dependent workers.

Concerns are visible in public forums used by technology workers. In one January post on Blind, an anonymous senior software engineer with seven years of experience said she had been laid off while on an H-1B visa and was “not interview-ready,” highlighting how quickly job loss can become a visa problem for H-1B workers in the US.

Junior developers face the squeeze

The combination of AI tools and tighter hiring is hitting early-career developers hardest, said Adarsh ML, a product engineer at Ather Energy who tracks global engineering hiring trends.

“Companies are increasingly looking for specialized engineers with machine learning and data science skills,” Adarsh said. “Job opportunities for people with zero to three or four years of experience are not really there anymore.”

The shift is also changing team structures, Adarsh said. Earlier, one manager may have had two or three interns and several freshers reporting to them. Now, many of those roles are being replaced by AI agents.

“Companies now want people who understand software well enough to catch the mistakes these AI agents make,” Adarsh said.

That creates a longer-term risk for the software talent pipeline.

“If companies only want people with five years of experience to manage AI agents today, who will have that experience five years from now?” he said. “There may not be enough experienced developers left.”

AI literacy becomes baseline

The impact is not the same for every role. Sophia James, an Indian software professional based in the US who works in database monitoring, said AI has not significantly changed her team’s daily workflow. But AI literacy is becoming a management expectation.

“Managers are trying to understand whether we are keeping up with the changes happening in the market,” James said. “Recently graduated students, whether BS or MS, are finding it difficult to get jobs. But people who already have jobs, like us, are not facing that much of an issue in terms of projects continuing.”

Jain also stressed that AI literacy is now becoming a baseline expectation for software developers, even outside AI-focused roles.

“Being AI-literate is a must now, even if the role is not directly in AI development,” he said. “This is like knowing Excel even if you are not from finance in the earlier era.”

Fewer developers required

Jain said AI coding tools are likely to reduce the number of developers companies need for similar tasks, making the technology deflationary for some software work.  

But Jain added the impact may not be entirely negative. Enterprises will need to invest in data, cloud, and modernization to become AI-ready, creating new work. AI could also encourage companies to build more applications internally instead of buying from SaaS providers, potentially creating opportunities for IT services firms.

The effect is already visible in hiring decisions. Nikhil Dhiman, head of engineering at CarInfo, said AI is changing the economics of early-stage software development, particularly when companies are building proofs of concept or testing new ideas.

“Some companies are very cautious now,” he said. “They want to leverage AI more and hire less. They just want to see the impact first.”

Navigating the new hiring market

Familiarity with tools such as ChatGPT and GitHub Copilot is now a baseline requirement for developers, said Sanchit Vir Gogia, chief analyst at Greyhound Research.

Developers need deeper expertise in areas such as cloud infrastructure and data engineering, as well as security and AI governance, he said. Those skills are closer to the systems enterprises need to validate and scale, rather than the routine coding work AI tools are starting to compress.

“The engineer who only produces output grows easier to replace as the output grows easier to generate,” Gogia said. “The engineer who can validate it, secure it, situate it in a real business, and stand behind the result becomes harder to replace.” For H-1B developers, he said, adaptation also requires visa planning. Developers should understand portability rules and employer sponsorship timelines before a job loss forces urgent decisions.

“A high-skilled worker has up to 60 days after a role ends, and the right to begin new employment the moment a valid portability petition is filed,” Gogia added. “The strategic error is treating that window as a safety net rather than a planning horizon.”

The article originally appeared on InfoWorld.