I think this is already happening, the monthly HN "Who's Hiring" threads have felt like attending a funeral since Microsoft-Google-Twitter mega-layoffs two years ago.
It's definitely bad, although attributing the state of the job market to AI is a mistake. As a result of wider economic conditions, money is expensive and companies can't justify borrowing money to have massive headcount, driving down the number of software engineers in demand. This caused a big glut of qualified software developers seeking employment, only to find that the music had stopped and there weren't any chairs left. This coincides with an ever growing number of new graduates in CS who are seeking to find their place in the market. In other words, the market is very competitive. This is especially true for fresh graduates.
To make matters worse, the big investment opportunity right now is AI/AGI/LLM/Agents and so forth. As money flows toward AI focused firms, they are spending their money on GPUs and electricity. Or, alternatively, they're paying for NVIDIA/OpenAI/.. to do that for them. Some jobs have opened up in this space, but a relatively small percentage is spent on labour.
