60% of organizations will adopt smaller software engineering teams by 2029, says Gartner

Artificial intelligence will drive a fundamental restructuring of software engineering teams over the next few years, with 60% of organizations expected to adopt smaller software engineering teams at scale by 2029, up from 15% in 2026, according to Gartner.

The research firm said the rise of so-called "tiny teams" reflects a shift in how software is developed as AI increasingly automates routine engineering tasks, allowing developers to focus on higher-value work rather than reducing overall hiring.

"AI is reshaping software engineering. It is redefining roles, reinventing teams, and fueling the demand for more software engineers, not fewer," said Aliyah Camacho, principal analyst at Gartner.

"The resources required to meet the growing demand for software and complex AI-enabled applications will outpace the efficiency gains from AI," she added.

According to Gartner, organizations should view smaller engineering teams as an operational redesign rather than a cost-cutting initiative.

"Tiny teams are not a cost optimization tactic," Camacho said. "This is a restructuring of teams to best take advantage of both human and AI capabilities and strengths."

The research firm said today's tiny teams typically consist of four to five members, although some projects can be handled by teams of just two or three engineers as AI capabilities and workforce skills continue to mature.

Rather than relying on large development groups, these teams are expected to work alongside platform engineering organizations that provide standardized development environments, automated workflows and self-service AI tools.

This allows smaller teams to focus on product development, customer requirements and innovation instead of routine engineering tasks.

Gartner said the traditional boundaries between software engineering roles will continue to blur as AI takes over repetitive work.

Instead of narrowly defined responsibilities, team members will increasingly be expected to combine product management, software development, user experience (UX), agent experience (AX) design and AI oversight within a single cross-functional team.

The research firm said a typical tiny team should include a product manager, a UX or AX designer and at least one AI-native software engineer capable of working alongside AI agents.

Despite the growing role of AI, Gartner warned organizations against reducing entry-level hiring.

The firm predicts that by 2028, companies that use AI as a reason to eliminate junior software engineering positions will weaken their long-term talent pipeline.

"Slowing junior-level hiring could lead to significant pitfalls, including inhibiting knowledge transfer, restricting the internal talent pipeline, and limiting recruitment to more expensive and competitive senior roles," Camacho said.

According to Gartner, organizations that balance AI adoption with continued investment in junior talent will be better positioned to build sustainable software engineering capabilities as demand for AI-enabled applications continues to grow.