I’ve been scratching my head at all the low-grade histeria about AI replacing developers. The narrative is simple and scary: AI can write code, so soon we won’t need human developers. I’ve heard this from executives and seen the headlines. Some companies are even using it as a justification for reduced hiring or layoffs.
But this line of thinking just doesn’t make sense. AI doesn’t replace developers; it makes them more productive. And for any company that understands basic economics, that means you should be hiring more of them, not fewer.
AI is a Productivity Multiplier
Let’s stop thinking of AI as a replacement for developers. AI is a ridiculously powerful tool, but a tool nonetheless. AI is great at handling boilerplate code, writing unit tests, translating logic from one language to another, and answering thorny syntax questions in seconds. It’s the ideal pair programmer. But it still needs a human to guide it, review its output, and integrate it into a larger system.
This doesn’t eliminate the need for developers. It supercharges them. It frees them from the tedious, repetitive parts of the job so they can focus on the hard stuff: system architecture, user experience, creative problem-solving, and understanding business needs. I’ve read stories of developers who set Claude Code at 6 low-level coding tasks in parallel while they’re in a a sprint planning or feature design meeting. That’s not replacing a developer, that’s making one developer as productive as three or four.
An AI can’t tell you what to build or why. It can’t navigate organizational complexity or mentor a junior engineer. It also has a tendency to get lost in its own spiral of mistakes. But it can help smart developers be wildly more productive.
More Productivity Means a Higher Return on Investment (ROI)
Now, let’s think about economics. Every employee represents an investment. A company pays a salary (the cost) in exchange for the value that employee creates (the return). If you introduce a tool that allows every developer to create significantly more value for the same cost, what have you just done? You’ve increased the ROI of hiring a developer.
Basic investment logic is simple: when an asset starts generating a higher return, you don’t sell it off. You buy more of it.
If you found a new technique that made your manufacturing machines more productive, you’d leverage that technique to expand your warehouses and produce more at lower cost than your competitors. It’s the same with developers armed with AI. Each one can now deliver more features, fix more bugs, and build more products. The logical business move is to increase your investment in this now higher-performing asset.
The Backlog Is Never Empty
The only reason to not invest more in something with skyrocketing returns is if you’ve run out of ways to use the output - in other words, if you simply don’t need any more of what it produces.
How many of you have a perfect product? Is your backlog completely empty? Are there no new markets to explore, no new features customers are begging for, no technical debt to pay down?
Of course not. For 99.9% of companies, the list of valuable development work is practically infinite. The primary constraint has always been development capacity. Now, with AI boosting that capacity, we have a golden opportunity to tackle more of that list and deliver more value, faster.
A Failure of Imagination is a Red Flag
Any company that announces it’s reducing its developer headcount because AI makes them more productive is telling you one of two things:
- “We lack the imagination and vision to think of anything else valuable for our super-productive engineers to build.”
- “We’re just looking for an excuse to cut costs, and AI is a convenient scapegoat.”
Either one is a massive red flag. It signals a company that sees technology not as a growth engine, but as a cost center. It’s a sign of a leadership team that is more focused on short-term stock performance than long-term innovation and market leadership.
The future isn’t fewer developers. It’s more developers, armed with AI, building better things faster than ever before. Any company that doesn’t understand that is sacrificing long term value for short term cost savings.