AI adoption drives down global software developer rates, hourly rates drop by upto 16%

Global software developer rates have declined significantly, according to the 2025 Accelerance Global Software Outsourcing Trends and Rates Guide, which reviewed 2024 data against 2023 benchmarks. Hourly rates dropped by 9% to 16% across key regions, with South and Southeast Asia witnessing the steepest reductions. Eastern Europe saw a 9% decline, while Latin America stood out by maintaining rate stability.

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The decline reflects tighter enterprise IT budgets and increased price competition among outsourcing providers. To stay competitive, many vendors are resorting to discounted pricing structures and flexible deal terms outside of standard rate cards. This trend underscores a broader slowdown in software services demand amid market saturation.

A key driver of falling rates is the accelerated integration of artificial intelligence into development workflows. Firms are leveraging AI to automate tasks, reduce external staffing needs, and achieve faster project turnarounds.

Despite the rate drops, about half of surveyed outsourcing providers expect modest rate increases of 1% to 5% in the next six months. However, this remains a sharp contrast to the double-digit growth seen during the pandemic years.

As AI adoption continues to scale, with predictions suggesting up to 90% of development tasks could be automated by 2027, the software outsourcing landscape is undergoing a fundamental transformation.