I agree that the H1B train is a red herring but I explained in my comment how AI has enabled mediocre talent to become more effective. Effective enough where they are "good enough" for what most companies need.
One of the reasons why offshoring was difficult was that asynchronous work wasn't the normal, so what a lot of companies would do is give the uninteresting pieces to the offshored teams.
That's taken a 180 in 2026. Google, OpenAI, Meta are building core infrastructure and software out of India. They don't even have to pay H1B rates.
Tech was already moving towards asynchronous working, expedited post COVID but AI just exponentially accelerated asynchronous work. Bulk of the software in 2026 has been written, reviewed and tested by AI (whether the HN crowd likes it or agrees with the practice, or not). All asynchronously.
These two factors have come together where the average tech worker out of SF is not longer very valuable - companies are just hiring equally talented workers out of Austin or Vietnam, for way cheaper, assisted by token spend.
The highly skilled will continue to get hired but the median worker out of San Francisco is being replaced
Not only did it not spread to engineering, but even the L1 and L2 were terrible. I worked in some large environments where working with those offshore folks was universally viewed as a nightmare.
Now, what has changed? Don't tell me Claude. As far as I can tell, these folks make a lot less, and the good ones can easily immigrate to Europe or somewhere else - maybe that has changed. Culturally, you have to often tell them very explicitly what to do and it is not normal to think outside of the box. I doubt that has changed.
So why would we be more afraid than we were in the early 2000's?
If you just want mediocre code that technically meets the requirements of a Jira ticket bashed out as cheaply as possible, an LLM can do that, you no longer need to hire a junior offshore to save money
>Now, what has changed?
We did.
The sorts of strongly hierarchical/rank based and "follow the process to our obvious demise" type workplace culture that is normal in big companies in the US today would be the punchline of a derisive joke about government/union/academic employment in 2006. Back then there was a HUGE culture gulf between an office in the US and an office in Bangalore or Manila because they ran that way but the office in SF or Redmond or whatever didn't. But in the past 20yr there has been a push to treat people (more than we already did) as replaceable cogs, do everything by committee, divy up responsibility, escalate everything, follow the process when the process and the big picture conflict because it's "not your station" to think about those things, etc, etc.
You can blame it on academia and MBA schools, you can blame it on the culture that we imported with the H1Bs, you can blame it on regulatory posture fanning the flames of all this, IDK, I tend to blame them all. But it absolutely happened. And now that we've incurred the cost of running that way just by virtue of our workplace culture changing there's a lot less operational cost to onboarding an offshore team.
Everyone should just be a small cog in a big machine.
I'm not sure I'd apply "good" as a modifier. Being generous, maybe "mediocre."
Good managers know how to find, cultivate, and maximize exceptional people, and that's a difficult job.
I have a feeling that LLMs are going to drastically improve the baseline quality of software. The top end will always require exceptional human involvement, but it will look different.
it remains to be seen if thats going to be the way in ~10 years after the dust has settled.
i suspect those middle managers will try to fight tooth and nail to hold onto that status quo, because it leaves them with all the power.
And even if delegating thinking to the offshore worker to delegate thinking to Claude ... why would you even bother delegating to them in the first place?
because for entire companies, due to outsourcing, there is no other team to delegate to?
Who's the engg. team who writes the website for Best Buy, Target, eBay, Paypal?
We also got laid off en masse. Well, I wasn't (for now), but several of my friends were months ago already and I'm not seeing them coming back anytime soon.
Laying off people is such an easy thing to do that no matter the region of the world, it's being done.
I've seen this enough to know where it goes - companies will move mid level jobs offshore, then relocate their "HQ" from a cheap midwestern city to an expensive one, NYC, Austin, LA, etc. Basically, the executives want to live somewhere expensive and cosmopolitan but they don't want to pay normal workers enough to live in those locations.
I think what you're seeing is change for the sake of change. You're friends will probably find jobs as "AI Engineers" at another company who just did a massive round of layoffs.
Internal turf wars, endless meetings to get “alignment” and pivoting on management’s latest whims are what slows feature delivery.
At the scale where hiring overseas workers make sense, there are atleast one PM, QA people, Ops - likely teams, not just one person per, involved. No one is releasing a feature to prod by lunch.
The workflow you propose is a very good representation of SMBs and they are behaving as you have proposed - hire one or two local devs from Austin, call them over Slack and release to prod by lunch.
So yes, this is happening, just wanted to point out that the "overseas workers" workflow is at a different scale of operations.
Because the amount of skill it takes to do that is not commensurate with a salary high enough to afford living in SF.
Companies have decided that a mediocre employee with Claude is now good enough, especially at the offshore price point.
The U.S. is having its midterms - it closes tomorrow - and the next two years are pivotal to who wins the senate for the next 4 years. Having it leaked that billions of dollars of domestic AI spend is going to India is going to sink the GOP.
OpenAI has large offices in Delhi, Mumbai, and Bengaluru. Anthropic is rapidly expanding their Bengaluru office to Mumbai.
India is an extremely large market - there are 4x more people in India than in the U.S, so it's a huge TAM but most of them don't read or speak English so there's a tremendous localization challenge.
India is undergoing a fundamental shift in their economy. They used to be a culture that used to save money before they spend it. Recently I saw a large group of Indian visitors by the Golden Bridge taking pictures and asked them how they could have afforded to save for the trip given the current explosion in prices.
They hadn't saved money - they had taken out loans for the trip. Everyone of them. Apparently their house help earns as much as a teacher in Nonalva, Mumbai (I might have got the city wrong but it sounded like that)
They also focus their students on STEM and are having a tech. hiring crisis (so talent is really cheap). Every engineer speaks atleast 3 different languages, including English and even more local dialects.
Adjusted for cost, the above average Indian engineer assisted by Claude is insanely more valuable than an average engineer from SF assisted by Claude. It's like DeepSeek V4.1 Flash 1017 vs your average US frontier model.
As I said in another comment, $180k/yr doesn't go very far in San Francisco specially if you want to have a family but I won't be surprised if you could retire in India after working on $180k/yr for 2-3 years.
Every market has an upper threshold of costs parties are willing to bear and San Francisco passed it where there's now active demand collapse. Companies are voting with their wallets and people in San Francisco are paying the price.
> but I won't be surprised if you could retire in India after working on $180k/yr for 2-3 years.
Irrelevant, but just for information, you could provided you're willing to live in a relatively rural area.
What does highly skilled even mean nowadays / with Claude Code?
They are not allowed to sink their free cash into R&D and not get heavily taxed for it anymore. Wouldn't the same apply to AI capex?
They were tolerated by the domestic workforce because times were good. Times are no longer good, so they're no longer tolerated.
You see this sort of pattern in all sorts of issues, not just H1Bs and tech.