In our view, the prevailing story about AI and technical employment is, at best, incomplete. The version that we often hear repeated— that AI is automating software development and demand for engineers is therefore falling — does not hold up well against several data sets.(1) CoderPad, a VC IV portfolio company(A) whose platform hosts technical hiring for more than 4,000 companies globally, has seen technical assessment activity grow since mid-2023, with strong acceleration among some of the largest AI-forward enterprises.(2) We believe those companies hiring engineers more aggressively will be better positioned to leverage AI.
That pattern is consistent with what broader labor market research shows. BCG's recent analysis of 165 million U.S. jobs found that the large majority of roles affected by AI fall into the category of being reshaped rather than replaced — workers keep their positions but face different expectations for how they work. Outright elimination affects a much smaller share.(3) We believe the distinction between reshaping and replacing matters a great deal, and it tends to get lost in coverage of this topic.
These patterns echoed what we heard at a recent dinner we hosted with technology executives in Boston, whose firsthand observations reinforced — and in places sharpened — what the data described above suggest. Among participants, we observed that the strongest area of agreement was engineering productivity: most leaders in attendance reported that they are seeing efficiency gains from AI-assisted development, which has reduced the immediate need to add engineering headcount. Just as notable, much of the conversation centered on future hiring plans and productivity assumptions rather than on near-term headcount, with AI prompting many of the leaders in attendance to recalibrate how they expect to staff and grow. For those companies that may have over-hired in prior years, it can help absorb some excess capacity. Many leaders, including those at this event and in our broader portfolio, however, described their engineering organizations as relatively stable today, a picture that maps closely onto BCG's distinction between roles being reshaped and roles being eliminated.
Where the demand is actually going
We believe one of the more underappreciated developments in the technical talent market is how broadly demand has spread beyond the technology sector. CBRE's annual tech talent report found that in 2024, for the first time in its eleven-year history, non-tech industries hired more technical workers than the tech industry itself. Healthcare's technical workforce grew by more than 10% in a single year; finance and logistics also expanded significantly. Meanwhile, the tech industry's own technical headcount contracted.(4)
This structural shift matters for how we think about the overall employment picture. The relevant market for technical talent is no longer bounded by the fortunes of technology companies — it cuts across sectors, and we believe the demand signal from that broader market may differ materially from what the technology sector's own hiring cycles might suggest.
AI is creating scarcity, not surplus
One notable finding from recent labor market research is that AI adoption is intensifying talent scarcity rather than relieving it. ManpowerGroup's 2026 Global Talent Shortage Survey, with responses from 39,000 employers across 41 countries, found that AI skills have overtaken all others as the hardest to find globally, the first time that has happened in the survey's history. Seventy-two percent of employers report difficulty filling roles broadly, a level of hiring difficulty that has persisted for several years running.(5)
CoderPad's data reinforce the point: hiring budgets among technical recruiting teams are expanding at the fastest rate since 2024, with 53% of hiring leaders expecting budget increases in 2026 — up from 37% the year prior.(2) AI appears to be generating new categories of demand faster than the labor market can supply them.
The bar is changing, not disappearing
What AI is changing is what technical talent is expected to do. In our view, writing new code from scratch is becoming less central to the software engineering role; systems design, debugging and the judgment to critically evaluate AI-generated output are becoming more so. Developers themselves appear to anticipate this shift: CoderPad's survey data shows a clear consensus that these higher-order skills will define technical excellence in three years' time, while the ability to simply generate code will matter less.(2) In this sense, we see AI raising the bar for what it means to be a strong engineer, not lowering it.
For growth companies, we believe this has concrete implications. Hiring infrastructure — how candidates are assessed, what signals predict performance, how AI fluency is evaluated alongside foundational skills — needs to evolve alongside the role itself. The organizations that adapt their practices now are likely to build more durable engineering teams. Those companies still hiring to yesterday's specifications may find the right candidates increasingly difficult to identify, regardless of how many they interview. We are seeing many forward-thinking organizations broadening the lens beyond engineering, increasingly evaluating people across functions on adaptability and curiosity as much as AI-specific experience.
A transition, not a displacement
We believe the disruption in parts of the technical labor market is real. CoderPad's survey finds that a meaningful share of developers feel less secure about their careers even as they rely on AI tools daily, and that tension is understandable.(2) But the bigger picture — demand broadening across industries, a global shortage of AI-capable talent and AI-forward companies hiring more rather than less — points toward a workforce in transition rather than one in decline.
The technology leaders at our dinner raised a related, thoughtful concern: that AI could pressure traditional apprenticeship models by automating some of the work junior employees have historically done. The broader view, though, was that this represents an evolution of work rather than a replacement of workers and that context, judgment and accountability remain deeply human responsibilities that organizations are a long way from removing from important workflows.
Taken together, we believe the evidence points in a consistent direction: AI's impact on how companies work, hire and develop talent is more nuanced, and more constructive, than the prevailing narrative suggests. The organizations seeing results are focused on helping their people become more effective alongside AI, and the demand for people who can do that well is growing.
Growth Timeline
January 1, 2024
Acquired by Vista Equity Partners
Rebrands as InvoiceCloud
Began trading on the New York Stock Exchange under the ticker symbol KVYO on September 20, 2023
January 1, 2023
Launched Klaviyo Customer Data Platform (CDP) and reviews - Surpassed 130,000 customers
January 1, 2022
Entered into a strategic partnership with Shopify, including capital investment - Launched partnership with Wix and completed first acquisition, Napkin.io - Opened Sydney office
January 1, 2021
Completes IPO on September 23 (NYSE: ESMT)
January 1, 2020
Rebranded to EngageSmart
Introduced support for Apple Pay, Google Pay
January 1, 2017
Entered the wellness vertical with the acquisition of SImplePractice.
January 1, 2021
Raised additional capital in a funding round led by Sands Capital - Launched SMS product - Announced native integration with Prestashop and partnership with WooCommerce
January 1, 2020
Raised approximately $200 million in new capital from Summit Partners and Accel
January 1, 2019
Raised approximately $150 million in capital from Summit Partners Opened London office
January 1, 2009
InvoiceCloud founded
Focused on local government and utility verticals
January 1, 2018
Surpassed 10,000 customers
January 1, 2017
Launched a partnership with BigCommerce
June 1, 2016
Surpassed 1,000 customers
January 1, 2016
Raised new capital in a funding round led by Astrial Capital
January 1, 2015
Received SAFE financing led by Accomplice
January 1, 2014
Surpassed 100 customers
January 1, 2012
Klaviyo founded
January 1, 2021
Completes IPO (NASDAQ: LFST) on June 10
January 6, 2020
Announces majority recapitalization
January 1, 2020
LifeStance completes 50th acquisition. With COVID onset, transitioned from 300 telepsych visits per week to more than 40,000
January 1, 2020
2.3M patient visits, 370 centers and 3,000+ clinicians
January 1, 2019
1.4M patient visits, 170 centers and 1,400 clinicians
January 1, 2018
930k patient visits, 125 centers and 800 clinicians
January 1, 2017
LifeStance founded with backing from Summit Partners and Silversmith Capital Partners
January 1, 2019
Launced charity streaming - live streaming fundraising
General Atlantic invests alongside Summit and management team
January 1, 2018
Entered the non-profit vertical with the acquisition of DonorDrive
Introduced and integrated telehealth solution
January 1, 2015
Summit Partners invests
Entered the healthcare vertical with the acquisition of HealthPay24
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About the Authors
The Peak Performance Group (PPG) is Summit Partners' purpose-built, in-house team of operating and functional experts, offering flexible, on-demand resources designed to support profitable growth and build long-term value. As part of the PPG, our Talent & Recruiting team members have been working hand-in-hand with our Technology, & Data Science team members to help portfolio companies build talent strategies and technical hiring capabilities to support organizational AI-readiness.
Related Experience
Sources:
(A) Please refer to the Important Considerations herein for additional disclosure information with respect to the use of CoderPad’s source data.
(1) For purposes of this Summary, “data sets” refers to the industry reports and surveys cited in footnotes (2), (3), (4) and (5) below. Please refer to the source data below for additional information with respect to each report and survey referenced herein.
(2) CoderPad, State of Tech Hiring 2026, CoderPad survey respondents represent companies actively using the CoderPad platform and may not be representative of the broader technical hiring market.
(3) BCG Henderson Institute, "AI Will Reshape More Jobs Than It Replaces"
(4) CBRE, “Scoring Tech Talent 2025“
(5) ManpowerGroup, “2026 Global Talent Shortage Survey”
Important Considerations:
As of June 21, 2026. This Summary is not an offer or the solicitation of an offer to purchase any security. This Summary is intended solely for existing limited partners. The content herein is made available for informational and discussions purposes only, reflects the views and opinions of Summit Partners and provides an update on AI and technical talent.
This Summary is not intended to be relied as the basis for any investment decision, and is not, and should not be assumed to be, complete. This Summary is not intended, and may not be relied on in any manner, as legal, business, tax, investment, accounting or other advice, and each recipient of the Summary should consult its own attorney, business advisor and tax advisor as to any legal, business, tax, investment or accounting advice. THE SUMMARY IS SUBJECT TO THE DISCLAIMERS, NOTES AND QUALIFICATIONS CONTAINED IN THIS DISCLAIMER.
For purposes of the Summary, “VC IV” includes Summit Partners Venture Capital Fund IV-A, L.P. and Summit Partners Venture Capital Fund IV-B, L.P., unless otherwise noted.
Past operating performance is not a guarantee of or necessarily indicative of future results. The information herein has not been independently verified by an independent party and should not be construed or relied upon as an indication of future performance or other future outcomes. The inclusion of CoderPad in this Summary is not intended to reflect the merits of such investment or any other investment currently in Summit's portfolio.
References to CoderPad should not be considered a recommendation or solicitation for the company Additional information, including a complete list of VC IV’s investments and net fund performance information is available via VC IV’s quarterly financial statements, available on the limited partner website.
References to the dinner herein reflect a dinner hosted by Summit Partners on June 10, 2026, attended by 15 technology executives, certain of whom are executives at Summit portfolio companies. The observations attributed to attendees reflect Summit Partners' interpretation of perspectives shared at the dinner, have not been reviewed or approved by attendees, and are as of the date of the dinner. These views are not necessarily representative of broader market conditions.
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In recent years, technological advances have fueled the rapid growth of AI, in particular generative AI, and accordingly, the use of AI is becoming increasingly prevalent in a number of sectors. The firm continues to build AI capabilities into its business and operations. Due to the rate at which AI is improving and the scope of its potential application is therefore broadening, at this time, the impact (including, where relevant, opportunities) AI may have on the Summit funds’ investments, as well as the wider financial sector, is still emerging and is not yet fully determinable. Additionally, portfolio company priorities with respect to the use of AI in company operations or in the development of AI-enabled products or solutions may change materially over time. Past practices or AI adoption trends among portfolio companies are not predictive of future adoption or outcomes, and there can be no assurance that any trend or illustration herein will continue. The impact of and risks associated with AI vary significantly by company, sub-sector, regulatory environment, capital availability and technological evolution. Use of third-party and open-source AI tools, such as Claude, ChatGPT or similar tools by Summit or its portfolio companies poses additional risks relating to the protection of Summit and Summit portfolio companies’ proprietary data, including the potential exposure of such confidential information to unauthorized recipients and misuse of the third-party intellectual property, which could adversely affect Summit, the Summit funds or their portfolio companies. Use of AI tools may result in allegations or claims against Summit, the Summit funds or their portfolio companies related to violation of third-party intellectual property rights, unauthorized access to or use of proprietary information and failure to comply with open-source software requirements. Additionally, AI tools may produce inaccurate, misleading or incomplete responses that could lead to errors in certain business activities, which could have a negative impact on Summit or on the performance of the Summit funds and their portfolio companies. Further, ongoing and future regulatory actions with respect to AI generally or AI’s use in any particular industry may alter, perhaps to a materially adverse extent, the ability of Summit, the Summit funds or their portfolio companies to utilize AI in the manner they have to date, and may have an adverse impact on their ability to continue to operate as intended.
About Summit Partners
Summit Partners is a leading growth-focused investment firm, investing across growth sectors of the economy. Today, Summit manages more than $44 billion in capital and targets growth equity investments of $10 million – $500 million per company. Since the firm’s founding in 1984, Summit has invested in more than 550 companies in the technology, healthcare and life sciences, and growth products and services sectors.