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The Pulse: Will US companies hire fewer engineers due to Section 174? - The Pragmatic Engineer

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👋 Hi, this is Gergely with a bonus, free issue of the Pragmatic Engineer Newsletter. In every issue, I cover topics related to Big Tech and startups through the lens of engineering managers and senior engineers. In this article, we cover one out of four topics from today’s subscriber-only The Pulse issue. To get full issues twice a week, subscribe here. In October, we looked into bootstrapped companies founded by software engineers and the article resonated with many readers; I got lots of messages from bootstrapped founders following that issue. Many messages were complaints about something called “Section 174 changes.” Here’s what one founder said: I did some research, and The Wall Street Journal and a handful of other news outlets have covered this change since last March. Still, founders reaching out shared that it feels like public awareness is low about just how large a problem this tax change is. Back last April, Ben Thompson at Stratechery covered this change, also expressing

Before we start: I'm hosting the first-ever The Pragmatic Summit on 11 February, 2026, in San Francisco. Join 400 top engineers and leaders as we answer the question: How is AI reshaping software engineering, dev workflows, and the modern engineering stack? Spaces are limited - don't miss out! Buy tickets here . --> Update in June 2025: a year and a half after deepdive was published in The Pragmatic Engineer in January 2024, there is lots of speculation on whether the Section 174 accounting changes are to blame for large tech layoffs in 2024. QZ covered the same topic that this article discuss

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