Tech companies are firing everyone to "fund AI", spending money on each other
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Re: Tech companies are firing everyone to "fund AI", spending money on each other
#2I've been wondering for a long time what the end stage of this current trend of capitalist self-cannibalization is going to look like.
I'm not terribly surprised.
Re: Tech companies are firing everyone to "fund AI", spending money on each other
#3I've been wondering for a long time what the end stage of this current trend of capitalist self-cannibalization is going to look like. I'm not terribly surprised.
From a company point of view, collapse and rebirth - when large companies fail they often end up spinning off lots of little companies some succeed, some fail and some massively succeed and the cycle repeats.
Someone will get left holding the bag because someone always gets left holding the bag - often lots of someones.
Re: Tech companies are firing everyone to "fund AI", spending money on each other
#4I've been wondering for a long time what the end stage of this current trend of capitalist self-cannibalization is going to look like. I'm not terribly surprised.
From a company point of view, collapse and rebirth - when large companies fail they often end up spinning off lots of little companies some succeed, some fail and some massively succeed and the cycle repeats. Someone will get left holding the bag because someone always gets left holding the bag - often lots of someones.
These are AI companies though, we cannot let them collapse. They will receive bailouts from the US taxpayer, they will not break up. If the US loses its tech companies, what economic advantage does it have left? Tech companies are literally the last crown jewel in America's crown; all the rest have fallen out and gotten lost.
Re: Tech companies are firing everyone to "fund AI", spending money on each other
#5The circular financing of AI spend isn't exactly a new story. Pretty sure even Altman has publicly said it's bubble
Re: Tech companies are firing everyone to "fund AI", spending money on each other
#6We’re in a general economic decline masked, in some key aggregate measures, by the AI bubble. That’s the reason for the job cuts.
Shuffling money around between AI adjacent companies may (but I doubt it) be enough to keep the AI bubble going through the downturn, in which case stockholders in those key companies manage to ride it out without pain, and executives too because they serve their constituency well.
More likely, it just delays the reckoning.
Re: Tech companies are firing everyone to "fund AI", spending money on each other
#7I've been wondering for a long time what the end stage of this current trend of capitalist self-cannibalization is going to look like. I'm not terribly surprised.
The exciting AI ending. When all the companies selling boondoggles fire their employees, who is left with money to buy the boondoggles?
Re: Tech companies are firing everyone to "fund AI", spending money on each other
#8Both "everyone" and "to fund AI" are doing a lot of work there. There probably was a lot of hiring in excess of requirements in tech over the past five years or whatever--and a bunch of people who jumped on board the ship primarily to capitalize on the gold rush are going to end up suffering as a result. Doesn't mean that tech generally isn't still a big opportunity going forward but may very well mean that outsized tech money opportunity on the west coast of the US declines. (And cost of living declines will lag) It's happened before with respect to the other coast (and the Midwest to some degree).
Re: Tech companies are firing everyone to "fund AI", spending money on each other
#9While there are points here that I agree with, I do not agree with the premise that they are firing people to fund AI. Funding of AI (keyword funding, not usage) I would say is an adjacent relation, but not the reason people are being let go.
I think it's a combination of factors including:
- Overhiring in the past, most of these companies were/are still employing way above the pre-pandemic numbers when overhiring was the norm. Many of these companies legitimately probably have more people than they need still.
- No matter what you think, AI is certainly already capable of improving productivity enough to make up for many of the jobs lost. Just look at how much AI can do today compared to even just a couple years ago. Practically every engineer who is worth their salt can put out way more than they previously could. Yes there is the question of quality and whether that's going to keep up, but you simply cannot argue at this point that AI is not able to increase productivity enough for the decreased headcount. Theres a reason junior hiring has fallen, they expect senior engineers to both output more using AI and to have the capability of effectively reeling it in and reviewing.
- As much as I hate to say it because it gets people angry and political: offshoring. Every company that I've worked on or worked at in the last few years has increased headcount of offshore employees and contractors.
- And lastly is simply expectations. Executives can see that other companies that have let go of people are able to still effectively run much slimmer.
Re: Tech companies are firing everyone to "fund AI", spending money on each other
#10The poster is kind of missing the point. If I see a tool that could make a lot of my employees 20% more efficient today, and maybe more than that in the future, I’m going to bet big on it.
Layoffs aren’t just to “fund AI” - layoffs (a) always happen and (b) likely genuinely make sense at some scale due to efficiency gain from AI.
It’s not “cut employees, send they money in circles to prop up stock prices” it’s “cut employees, like we always do (but more than usual since we have actual AI efficiency gains).” Separately, let’s yeet excess money in circles to prop up our stock price and AI is a great hype cycle vehicle for that.
Yeah layoffs always suck, especially big ones, but they literally always happen and IMO are not caused by AI circlejerking at the c level.
Also, for anyone curious about “AI gains”. In my role at bigtech company I need to have a high/medium level understanding of like 30 products and teams. LLM summaries of docs, tickets, slack, etc mean I can get a basic understanding and history of any topic in seconds, rather than spending hours reading all those sources. My role is not unique or special