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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

#71

Post by dgellow »

TeriyakiBomb wrote: post #66

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…

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?

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

#72

Post by pjmlp »

jibe wrote: post #54
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…

I’ve never worked anywhere where lack of work or projects was the bottleneck. Time, headcount, and budget were always the constraints. Even in cost centers like IT or ops, there’s usually an endless backlog of work, technical debt, support requests, and improvements that never get prioritized because resources are limited.

Try consulting agencies, or freelancing as external contractor.

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

#73

Post by zipy124 »

elktown wrote: post #59

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. 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.

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

#74

Post by disgruntledphd2 »

elktown wrote: post #59

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. 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 probably had about 75% of the engineers they needed (and about 10% of the sales people). But they grew engineering much faster than sales for some reason (engineering in the broad sense including data and product).

That being said, it's easy for people to look at other parts of a company and think they are over-staffed, because we don't see all the work necessary to keep the balls in the air.

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

#75

Post by redwall_hp »

pjmlp wrote: post #35
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…

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…

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 expensive C-suite with an LLM would help make better, growth-oriented decisions.

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

#76

Post by mattkrause »

cootsnuck wrote: post #64
hilariously wrote: post #44

Earlier quoted context omitted.

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.

And I’m sure those companies also have “backlogs" due to limited labor/labor costs. There are always shelves to face, vehicles with deferred maintenance, and so on.

Obviously, there are limits: I’m not sure what my local grocery store or bus line would do with 100 new workers, but I have no doubt they could put a few people to work right away.

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

#77

Post by transcriptase »

cootsnuck wrote: post #64
hilariously wrote: post #44

Earlier quoted context omitted.

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.

They’re also the ones constantly hiring and recruiting because internally nearly everyone benefits to having more people “under them”, and there’s a massive HR/Talent team that doesn’t go into hibernation after a 20% workforce reduction. Organizations want to grow, not because they need to but because it’s in the best interest of nearly all individuals still on the inside.

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

#78

Post by pjmlp »

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.

So you never worked at a consulting agency working on bids for outsourced development.

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

#79

Post by lotsofpulp »

redwall_hp wrote: post #75
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…

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…

The rational thing is to analyze the opportunity cost of the investment, which is dependent on the always fluctuating prices.

Some businesses can grow, some cannot grow, some grow at different rates. The risk adjusted (subjective) prices determine whether or not an investor should walk away.

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

#80

Post by disgruntledphd2 »

nutjob2 wrote: post #26
eru wrote: post #13

Earlier quoted context omitted.

On the scale of a company, augmenting is replacing. If a worker plus AI can do the work of two workers without AI (but cheaper), you go for that; and it doesn't matter how good or bad AI is without the human.

When the AI models hallucinate up a catastrophe, managers will reevaluate that calculus. Humans are accountable and act accordingly, models are not.

Yeah, it's probably be something like:

2025: agents are the future!

2026: we don't need any new employees

_stuff gets real_

2027: wow, employees are actually pretty good value.*

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