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The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

libertas.software

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Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#61

Post by mk89 »

ambicapter wrote: post #52
pjmlp wrote: post #35

Earlier quoted context omitted.

The major issue, is that once people are more productive with AI, you are able to replace people because less of them are required. You see this in enterprise consulting, wiht the increase in cloud, serverless, SaaS/iPaaS, low code/no code, content generation and translations, followed by AI agent orchestration, the teams can be reduced down to about 1/3 of what they used to be. It isn't as if there are enough projec…

This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money. > It isn't as if there are enough projects around to keep the other 2/3 busy I've never worked at any company where there was any limit to the work to be done. Sales people don't give a shit what your product can do, only what they can sell, and they never sleep.

>I've never worked at any company where there was any limit to the work to be done. Sales people don't give a shit what your product can do, only what they can sell, and they never sleep.

The issue is how much of that work is "valuable" in the sense = makes money.

I have both been in projects and seen projects which were canceled once it turned out they didn't make money (bad sales? bad product? bad market fit? a bit of everything?). This you can only afford when you have money to spare (= with debts? high profits...?).

With the interest rates so high, how can a company justify hiring dozens/hundreds of people more? It's a risk, and what I am seeing now is that companies are shrinking left and right to focus on the business that makes money and reduce headcount on what they believe doesn't make money at all, or it's a cost too high for their "long term strategy" or whatever. Right now the only metrics that they are caring about is EBIDTA. They don't even care anymore about ARR, they are becoming irrelevant as long as they stay within a range (we want 20% increase, but we're ok with 5%).

The AI will replace everything and everyone is working out pretty well for Anthropic/OpenAI, though.

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#62

Post by [deleted] »

hilariously wrote: post #44
sumeno wrote: post #39

Earlier quoted context omitted.

In 20 years I have never been on a team that didn't have twice as much work as we had people to do it. Businesses are not magically efficient

Your experience of how the world works is usually because of what work you have done. You can't grow twice as many crops, sell twice as many groceries, drive twice as many busses, because of AI - fundamentally there's a consumption problem as well. Many businesses are not bottlenecked by processes that are computer based.

[deleted]

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#63

Post by fullshark »

embedding-shape wrote: post #8

Cutting people because of AI makes no sense, you know these people are good without AI, you'd want to keep them! Freeze the constant over-hiring instead, and take care of the people you know aren't lobotomized yet, and train them if needed. I'm seeing so much shedding of knowledge workers though, even though AI clearly isn't ready to replace people, just ready to augment them currently, that it looks like looney-tune…

Because they aren't getting cut cause of AI. They are getting cut cause of the uncertainty re: future revenue streams AI is bringing. These layoffs are driven by fear and leadership lacking any vision for how the post AI world looks for their company. Their solution is to tighten the belts, which of course opens the window further for the AI companies to actually write software and make them obsolete.

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#64

Post by cootsnuck »

hilariously wrote: post #44
sumeno wrote: post #39

Earlier quoted context omitted.

In 20 years I have never been on a team that didn't have twice as much work as we had people to do it. Businesses are not magically efficient

Your experience of how the world works is usually because of what work you have done. You can't grow twice as many crops, sell twice as many groceries, drive twice as many busses, because of AI - fundamentally there's a consumption problem as well. Many businesses are not bottlenecked by processes that are computer based.

But the firms in the headlines doing layoffs after layoffs aren't growing crops, selling groceries, or driving busses... They're knowledge work roles in companies selling intangible products and services. It's large corporations doing this much more than SMBs.

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#65

Post by pech0rin »

The misunderstanding is that people equate what these companies are saying and what they are doing. In reality this is the perfect time to fire people under cover. This happens every X years where as leadership you can say this tech is displacing you, when in truth its just that you arent needed anymore.

This is a capitalism functioning correctly as labor as in then moved to places it is needed more. Its sort of shocking to see devs complain about getting laid off. Thats the point of a high variance career. Great and terrible outcomes go hand in hand, if you want one you must expect the other.

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#66

Post by TeriyakiBomb »

In reality there are two kinds of layoff going on.

Idiots who truly believe that AI will actually replace a significant amount of the workforce (Long term, it will not but some jobs displaced) and those who have internalised that ZIRP is over, they need to be more lean as VCs have closed their wallets and saying "We've revolutionised our workflow with AI" than "We haven't turned huge investment debt into profit in 5 years and we need to reduce headcount for even the slightest chance of that happening, or at least raise again by saying 'AI' over and over" has far better optics.

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#67

Post by dgellow »

ambicapter wrote: post #52
pjmlp wrote: post #35

Earlier quoted context omitted.

The major issue, is that once people are more productive with AI, you are able to replace people because less of them are required. You see this in enterprise consulting, wiht the increase in cloud, serverless, SaaS/iPaaS, low code/no code, content generation and translations, followed by AI agent orchestration, the teams can be reduced down to about 1/3 of what they used to be. It isn't as if there are enough projec…

This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money. > It isn't as if there are enough projects around to keep the other 2/3 busy I've never worked at any company where there was any limit to the work to be done. Sales people don't give a shit what your product can do, only what they can sell, and they never sleep.

You can always find things to do but how much of that work has a positive ROI, or contributes to your business? You always have some bottlenecks, let's say implementing features was your bottleneck before AI, and you had a team of 15 product engineers with a 1y roadmap. With Claude Code a team of 5 was able to get that done in let's say 3 months. You don't magically come up with 9 months of work for 15 people right away. And your bottleneck will now be sales or something else, but your engineers won't convert to becoming sales people (or at least not all of them), and you might only need 1-2 more sales people, not 15.

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#68

Post by MobiusHorizons »

valvar wrote: post #42
hmmokidk wrote: post #37

Earlier quoted context omitted.

I think there are risks: - AI pricing is variable, probably the cheapest it will ever be right now - AI produces a lot more shit for humans to review, and you will always need humans. If you don’t focus on keeping things simple you will probably play yourself unless you’re good at separating out blast radiuses. - I see a lot of super low quality work that doesn’t solve the problem but it’s like look that guy solved t…

Why wouldn’t inference just keep getting better and cheaper as hardware and algorithms improve?

The typical playbook for a VC funded startup is to race to a monopoly where the company can have higher margins. Prices continuing to go down for the consumer over time would require competition to stay high in the long term, and even then it’s not clear if even current prices are profitable.

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#69

Post by austin-cheney »

I agree with the article in its entirety, but its just so easy to play devil's advocate here. There might actually be a large value add to companies who replace poor performing employees with AI. So, who are the low versus high performing employees?

The largest problem with software employment is defining software developer performance. There is no industry baseline for defining or measuring this. Its so easy for a person to be that 10x (or much greater) developer in a compatible team or be a complete failure on the wrong team.

Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't

#70

Post by jasonlotito »

ambicapter wrote: post #52
pjmlp wrote: post #35

Earlier quoted context omitted.

The major issue, is that once people are more productive with AI, you are able to replace people because less of them are required. You see this in enterprise consulting, wiht the increase in cloud, serverless, SaaS/iPaaS, low code/no code, content generation and translations, followed by AI agent orchestration, the teams can be reduced down to about 1/3 of what they used to be. It isn't as if there are enough projec…

This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money. > It isn't as if there are enough projects around to keep the other 2/3 busy I've never worked at any company where there was any limit to the work to be done. Sales people don't give a shit what your product can do, only what they can sell, and they never sleep.

> This sounds like an attempt to rationalize the fact that your business isn't that effective,

That's actually it. The part that can be sped up with AI don't change how slow everything else still takes. If you need 2 weeks to see the results of a change before AI, you still need that after AI.

Basically, your business is not keeping pace with development.

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