What I'm seeing is an explosion in software jobs at the small-company size level, with larger companies mostly holding steady (sans a few exceptions like Block and Oracle), as I've seen from: https://www.macrotrends.net/stocks/charts/AMZN/amazon/number.... The jobs are out there in my opinion for a competent engineer with decent AI experience (not going to comment on new grads or very high level principal+ engs, because I am neither).
I do think you're right, custom software is now more viable for small companies, you'll see a lot of them hiring a SWE or two to build out custom tooling whereas before it didn't make financial sense since it needed a whole team.
Although the reality is different from the projections, the emotional impact is severe. I sense an incredible amount of demoralized colleagues who are further dismayed from the arrogant public who are largely condescending about their skills and professions. If things recover, it will bring with it plenty of battle scars.