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I've seen this a bunch of times before, largely in TV/movies, where someone will be looking at a job posting and it will say "X need not apply". Does this mean as in "there is no reason for X to apply", or does it instead mean "X MAY NOT apply"?

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    Using need rather than may, must is just a "euphemistic, softening" device in such contexts. The "X need not apply" usage is a set phrase, which would never be rendered as "There is no need for X to apply" (that version might in some contexts mean X's don't need to apply because they'll be automatically included without even needing to go through the application process). – FumbleFingers Dec 12 '14 at 16:43
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"X Need Not Apply" is a discriminatory message that essentially means "If you're X, don't bother applying because we won't hire you." For example, "No Irish Need Apply" signs were part of a wave of discrimination against Irish-American immigrants. That's probably the most well-known instance of it, and most "X Need Not Apply" signs in fiction are probably a reference to it. For example, a short about how automation is replacing human work was titled "Humans Need Not Apply."

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It means the former. Need here is being used as an auxiliary, adding a sense of obligation, requirement or benefit/reward to the main verb (apply, in this case). Since it is paired with not, the meaning is that there is no reward.

If the writer of the job posting had wished to specify which skills are important for the job, they could have written

Only Y need apply

where Y indicates a suitably qualified applicant.

The lack of reward or requirement does not imply a total prohibition. The unqualified may apply; it will simply do them no good.

It is worth noting that while you may have seen this often in fiction, it is much less likely to be used in real life as the author would risk accusations of discrimination (and possible legal action). It is much safer to present a firm description of the positive attributes sought than to rule out qualities seen as a disadvantage.

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Certainly it usually means "X will not even be considered, so need not waste our time by applying". However, in some cases it means "X will automatically pass, so need not waste their time by applying." The canonical case is a job advertisement saying 'Previous applicants need not apply'; does that mean "We already have your details on file; we will contact you if you are one of the people we need" or does it mean "You failed last time, don't bother us again"? The correct answer is that it doesn't matter: either way there is no point worrying about this job.

The literal answer to the question asked is "The first of your options, though the reason why you need not apply may not be what you expect. Need not in this case means literally that there is no point in applying; whether you take that as equivalent to may not apply is up to you."

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