Change is a constant for software engineers. It always has been. If your job is doing stuff that should be automated, either you are automating it or you are not a very good software engineer.
A few key fallacies at play here.
- Assuming a closed world assumption: we'll do the same amount of work but with less people. This has never been true. As soon as you meaningfully drop the price of a unit of software (pick your favorite), demand goes up and we'll need more of them. Also it opens the door to building software that previously would have been too expensive. That's why the amount of software engineers has consistently increased over the years. This despite a lot of stuff getting a lot easier over time.
- Assuming the type of work always stays the same. This too has never been true. Stuff changes over time. New tools, new frameworks, new types of software, new jobs to do. And the old ones fade away. Being a software engineer is a life of learning. Very few of us get to do the same things for decades on end.
- Assuming people know what to ask for. AIs do as you ask, which isn't necessarily what you want. The quality of what you get correlates very much to your ability you ask for it. The notion that you get a coherent bit of software in response to poorly articulated incoherent prompts is about as realistic as getting a customer to produce coherent requirements. That never happened either. Converting customer wishes into maintainable/valuable software is still a bit of a dark art.
The bottom line: many companies don't have a lot of in house software development capacity or competence. AI doesn't really help these companies to fix that in exactly the same way that Visual Basic didn't magically turn them into software driven companies either. They'll use third party companies to get the software they need because they lack the in house competence to even ask for the right things.
Lowering the cost just means they'll raise the ambition level and ask for more/better software. The type of companies that will deliver that will be staffed with people working with AI tools to build this stuff for them. You might call these people software engineers. Demand for senior SEs will go through the roof because they deliver the best AI generated software because they know what good software looks like and what to ask for. That creates a lot of room for enterprising juniors to skill up and join the club because, as ever, there simply aren't enough seniors around. And thanks to AI, skilling up is easier than ever.
The distinction between junior and senior was always fairly shallow. I know people that were in their twenties that got labeled as senior barely out of college. Maybe on their second or third job. It was always a bit of a vanity title that because of the high demand for any kind of SEs got awarded early. AI changes nothing here. It just creates more opportunities for people to use tools to work themselves up to senior level quicker. And of course there are lots of examples of smart young people that managed to code pretty significant things and create successful startups. If you are ambitious, now is a good time to be alive.