We've seen something similar in the software world: the shift to higher level languages meant that a much larger part of the work had to be done near the customer(and probably near the inventor), which meant less outsourcing.
I actually feel that it serves the function of openning up new opportunities and use models, which could well lead to more demand for embedded designs. Only time will tell, but either way it will be a significant change.
Open-source hardware is on the cusp of changing the game in therms of embedded design. Does this mean there be less demand for engineers to design embedded systems if we can use off-the-shelf products?
I'd better spend some time with my nephew and his Arduino kit.