AI is just code for the actual economic reasons that companies are struggling with but it sounds better if you blame innovation instead ( Think AI = Actually Inflation, Actually Interest Rates, Actually Iran as the causes). The premise of this article is true because the companies who didn't shed jobs probably have a healthier balance sheet.
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
#172Earlier quoted context omitted.
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.
Generally you can only profitably expand into adjacent products. Making and selling cars and HVACs are completely different, meaning that your expansion will be starting from zero knowledge. Furthermore, the sales channel of HVACs, sales strategies, etc. is not likely to have much in common with that for cars, so you are essentially creating a whole new startup company. (In the case of HVACs, it would be a startup in…
Perhaps you've heard of Mitsubishi, Toyota Group or Samsung? Notably, Mitsubishi is involved in making cars, HVAC and heavy equipment.
Or, for that matter, Apple. If they subscribed to that philosophy, the iPhone wouldn't exist. Honestly, they would have kept trying to make the Apple II.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#173I have been in multiple meetings where corporate folks parrot AI and productivity but if I ask for a business case and/or productivity savings, they go silent.
The funniest meeting has to be where someone said - "I have been using LLMs and it is terrible for our use case. Can we have an AI demo for Microsoft Copilot?" Imagine their surprise when they were told Copilot is LLM.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#174Earlier quoted context omitted.
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, otherwise adding more people would result in making more money. Yes, or that businesses are expecting a slow down in the economy that hinders their ability to sell (i.e. their customers are going to cutback on spending) This was the case last year (or maybe it was the year before) where technology companies saw their custom…
But if we're assuming that AI is highly effective, shouldn't that lead to short-term growth in the economy as inflation drops? Shouldn't people then be expected to spend even more?
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#175My pet theory is that AI enables programmers to be relatively more productive than other roles. So, if I want to grow my company, shouldn't I hire MORE programmers? Anyone know a good counterargument? Along another vein, I guess I wonder with my limited knowledge of economics if the demand for programmers is elastic or inelastic.
> So, if I want to grow my company, shouldn't I hire MORE programmers? You take the same pot of money and allocate it differently: 2010s: Hire 10 programmers 2020s: Hire 9 programmers and pay for the best AI money can buy The 9 programmers with AI will be more productive than the 10 without.
Late 2020s, hire 5 developers and pay for the best AI money can buy.
2029, hire a developer and pay for the best AI money can buy.
2030, pay for the best money AI can buy.
At some point anything any nuanced business context a team needs and that requires humans today will be digested in AI onboarding.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#176I 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’d say it differently though. The company who hired all these people are finding they don’t have enough value added projects to keep them employed. Most of the FAANG and larger VC backed companies have something in common. They typically have 1-2 huge cash cows and they have a bunch of moonshots, R&D type stuff, etc. They are at a point where most of the moonshots have been disincentivized financially and just overall don’t see high enough ROI to continue pouring money into; exception is AI, which is a different skillset and this personnel can’t just pivot to it.
The fact is, a lot of tech products have matured and kind of entered maintenance mode. Feature additions are smaller incremental improvements than ever. If you cut out AI, I don’t know if any of the products we all use daily look much different than they did 5 years ago.
So my argument is this simply represents a natural business cycle where these companies are shifting from growth to mature. This shift always comes with a recalibration of expenses.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#177I 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 p…
The problem for high-performing developers (even the elitest) is that over a long enough time scale, they won't be remotely competitive with high performing AI. At the moment we need human operators to guide and supervise these AIs, but unless the tech's progress grinds to a halt for some unforeseeable reason, it won't be this way for long.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#178These two ideas, that (1) AI is making people more productive and (2) we are laying off employees because AI replaces them. Those two ideas are mutually incompatible. When employees become more productive, you always always always want to hire more of them, because it’s a multiplier on your outputs and therefore an efficient use of resources. That is why one of these narratives is total bullshit. Either “layoffs from…
This assumes that demand is elastic and unbounded. It might be true that there's a lot of untapped demand for software, but especially considering individual firms, it's plausible that demand for their offerings might be capped. In this case it does make sense for firms to shrink.
Analogously, automation and productivity improvements in farming drastically decreased employment in the farming sector, from basically everyone to basically no one.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#179I 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.
> which is how GitLab is like 5x larger than Valve. Doesn't Valve hire tons of contractors? I don't think anyone except them knows how many people/agencies they're paying to work on stuff like proton, linux, mesa, vulkan, etc., not to mention internal projects. Valve could not actually do all that they do with just the leaked headcount numbers.
I'd expect GitLab to have contractors as well like most companies. Unclear if there's a significantly larger amount at Valve. It's a large gap to fill with contractors though to reach GitLab numbers.
GitLab is also a smaller company than I'd expect Valve to be - given its products & reach - if it was public and went through the same kind of inflation process.
Re: The Companies Cutting Headcount for AI Will Lose to the Ones Who Didn't
#180Earlier quoted context omitted.
Two things: 1) Unlimited PTO is a scam. Ask anyone who ever got paid out six weeks salary when they changed jobs. 2) “the craft” is doing some heavy lifting here. I happen to enjoy AI-assisted dev, but it is nothing like the work that drew me to the industry. Otherwise agreed on all counts.
> Unlimited PTO is a scam Well, no. It's just the target beneficiary is not you (the employees) but the employer. Unlimited PTO resolves the employer from paying out PTO when they make you "redundant".
It's more than that. Unlimited PTO in practice also results in people taking less time off.
Some people have to be reminded to take time off for themselves (like me in my early years), and without a predefined amount of PTO and an expiration mechanism, there's nothing stopping them from going extended periods without taking any time for themselves.
Most people grow out of that eventually, but their gems turn black before they fully advocate for their own work/life balance.
The other side to that coin is that when employees take varying amounts of time off, it becomes easy for managers to pressure anyone taking more time off to conform with those who take less (and sometimes none at all).