Simply reality is very few companies are cutting because of AI. They’re just trimming bloat that’s been there the whole time. The AI narrative is broadly just PR spin and CEOs trying to look cool.
The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
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Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#92“Next quarter is next quarter’s problem. Let’s talk about bonuses.”
— Every every single current tech c-suite
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#93I think the unfortunate reality is that lots of companies in our industry have suspiciously inflated employee counts in the first place. Even when removing AI and the pandemic over-hiring, I wouldn't have been surprised to see corrections sooner or later. Employee count seems to correlate to stock market incentives - which is how GitLab is like 5x larger than Valve.
> I think the unfortunate reality is that lots of companies in our industry have suspiciously inflated employee counts in the first place. Even when removing AI and the pandemic over-hiring, I wouldn't have been surprised to see corrections sooner or later. It's funny to me that everyone talks about pandemic over-hiring, as if this hadn't been a thing for a decade before that. Like, when I started at FB in 2013, they…
Exactly this - the late 00s and 10s we were riding the wave of the internet and smartphone adoption. Those markets have matured now and this is ultimately just the response. Covid was like some weird last hurrah for irrational spending. LLMs are just where all of that silly energy is going.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#94Earlier quoted context omitted.
If you're increasing productivity, you should be doing more and growing, yes? If you're cutting payroll costs and trying to have the same level of capacity...your business sucks and you deserve your stock tanking. Layoffs are a strong signal that a business is not investing in growth and is just trying to wring more profit from the same thing. If investors were rational, they'd walk away. Maybe replacing the expensiv…
In consulting you don't make magically customers out of nowhere, and there is a limited pool of customers to feed from.
Again, shortsighted. There's no reason a business has to have a single product. If you run out of customers for cars, you make HVAC and front end loaders.
A lot of companies simply have no direction and aren't looking to build new products. They had a success, rotated in some myopic execs, flipped into rent-seeking mode and are trying to wring more cash out of the same progressive enshittified product.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#95In 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…
But we see layoff from companies that are making record profits, how does that fit here? Are you saying all of them are AI-idiots?
I think my read of it would be something like extreme short term thinking, and essentially like a push your luck game. If we can make it to the next model, maybe we can get enough productivity to reverse course.
As I understand it there are some underlying problems in the industry. Companies aren’t exiting which means VC’s aren’t getting returns and investment is slowing. In order for NVIDIA to maintain its current valuation, it has to keep growing at the rate it’s been growing which is the time during which companies have been piling on debt to perform extreme investments in AI. On top of this the growth rate is also based on extreme circular dealing.
So the whole thing isn’t sustainable, but the crash doesn’t happen until some big player blinks and their forecast / valuation goes down. And the only path to the kind of growth / gains people saw during the peak of the internet era is through AI.
Probably none of these big companies will fail, but it will be deeply uncomfortable for all of them when the music stops. And I wonder if it bankrupts a swath of the current generation of VCs.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#96Earlier quoted context omitted.
Because you don’t have enough work that really needs doing, at least in that particular area. You cut engineers because the bottleneck to increased revenue isn’t software features or bugs, it’s marketing/sales; human beings’ limited attention for which there is now more competition than ever; and customers’ available funds. ETA: this is sometimes (though not always) very different for a mature company than an early s…
That is a very convenient message for marketing and sales people. The fact that their whole job is crafting messages shouldn’t raise any eyebrows.
Ha! I’d never thought about it like that but…yeah.
I suspect another big part of it is that marketing and sales are relatively easy to measure and to scale.
You can hire one, two, or three new salespeople and expect that revenue will change more or less proportionately. Fixing (or ignoring) a handful issues doesn’t scale so smoothly—-there are jumps where the product suddenly seems much better/worse.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#97I think the unfortunate reality is that lots of companies in our industry have suspiciously inflated employee counts in the first place. Even when removing AI and the pandemic over-hiring, I wouldn't have been surprised to see corrections sooner or later. Employee count seems to correlate to stock market incentives - which is how GitLab is like 5x larger than Valve.
It's largely also down to management hierachy. Valve and Jane street for example both have semi-anarchist managment structures. In normal companies like GitLab, your worth as a manager and compensation is usually tied directly to the hierarchiecal structure. This incentivises you to create a project to hire a team and so on.
Yup, it's certainly a mix. I think the stock market incentive is most obvious for the usual VC-style "this must look presentable to the stock market before IPO"-spiel. After that I'd expect management/corp politics incentives to play a larger part indeed.
But isn't tech a bit unique in how accepted this kind of self-serving corruption is at pretty much all levels? From the "This might require a few extra folks, but I want to pad my resume" IC level all the way up to "Let's make this look good for Wall Street" exec level.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#98Cutting 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…
> Cutting people because of AI makes no sense, you know these people are good without AI, you'd want to keep them!
You can't put "undocumented knowledge" into a spreadsheet.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#99[dead]
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#100In 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…
But we see layoff from companies that are making record profits, how does that fit here? Are you saying all of them are AI-idiots?
I would say that just the old "stupid" corporate practice of overhiring - for stock manipulation, reduce the talent pool for competitors etc. - Why Do Companies Overhire Just To Lay Off? - https://www.youtube.com/watch?v=KCF78a2wTHM