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

https://libertas.software/en/knowledge-hub/19/the-companies-cutting-headcount-for-ai-will-lose-to-the-ones-who-didnt

by soft-research • 2 months ago

204 201 2 months ago

libertas.software

internetguy• 2 months ago

It is a little ironic that this article reads so much like an AI-generated one.

feverzsj• 2 months ago

It is. Just count how many em dashes in it.

duskdozer• 2 months ago

And the article images with the signature AI-face

robot_jesus• 2 months ago

I love my em dashes but I can't disagree with your assessment at all.

The entire tone is pure AI slop.

sockaddr• 2 months ago

Any company that uses that type of background image definitely churns out AI slop

haburka• 2 months ago

Preaching to the HN choir - great for upvotes but does anyone read anything new in this? Feels like I’ve seen the same article about this every month and I don’t think business people care.

iLoveOncall2• 2 months ago

You must be joking, the vast majority of HN loves AI and thinks they don't need to write any code anymore.

eru14• 2 months ago

Some people love AI, some don't.

But the point about there being nothing new in the article still stands.

adamska• 2 months ago

more articles there will be about this - bigger the probability of this idea it will be in the dataset for chatgpt 6.9 thinking so the c-level of the companies would stop firing people

sph• 2 months ago

The AI slop articles about AI will continue until morale improves.

Flag and move on. Too bad the HN audience eats this shit up by the spoonful.

empath75• 2 months ago

Even if you hire more people into jobs where AI acts a multiplier, there are still going to have to be layoffs where AI basically makes certain jobs _redundant_. I think both things are happening and will continue to happen, and happened anytime new technology came out.

embedding-shape• 2 months ago

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-tunes currently.

eru14• 2 months ago

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.

skinfaxi2• 2 months ago

The point is if a worker plus AI can do the work of two workers without AI, then why not keep both workers and have them both use AI to have the equivalent of four non-assisted workers?

trimethylpurine• 2 months ago

That's not always the case. Augmenting certainly can mean that, but it can also mean doing something that people couldn't do before.

For example, looking through meta data in a SQL environment that you didn't know existed to troubleshoot an issue. And a million other things. The odds of any employee not knowing everything are very good, even when humanity as a whole had already discovered that thing.

nutjob2• 2 months ago

When the AI models hallucinate up a catastrophe, managers will reevaluate that calculus.

Humans are accountable and act accordingly, models are not.

hmmokidk• 2 months ago

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 the problem in one day! Promote him! Everyone is happy except for the end users who for whatever reason are being totally ignored (whose problem it fails to appropriately solve) and I saw this in accounting software so…hello eventual lawsuits?

pjmlp7• 2 months ago

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 projects around to keep the other 2/3 busy, so eventually when there are enough of those people on bench they have to find something else.

ambicapter• 2 months ago

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.

jibe• 2 months ago

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.

redwall_hp3• 2 months ago

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.

noodletheworld3• 2 months ago

It isn't as if there are enough projects around to keep the other 2/3 busy, so eventually when there are enough of those people on bench they have to find something else.

Eh, are they doing that though?

Anecdotally, firing people “on the bench” isn't whats happening.

Read the tweets. Listen to people still working at these big corps. They are gutting teams and pushing more work onto people because they believe they can be more productive, not because they are.

Lets that sink in.

People are being made redundant on the basis that leadership believes that in the future they will have an over capacity and theyre cutting early to avoid the bench scenario.

It is speculative.

What this article is arguing, is that, that is stupid.

If, in the future, you need to spin up new initiatives, youve screwed yourself by disposing of your excess capacity in the magical hope that your current capacity will magically increase itself by … spending more money on tokens.

Its just nonsense.

AI is just an excuse for poor historical decisions and unfortunate global economic conditions.

The “cuts due to AI” will be real. There will be people sitting idle as the models improve and people learn to use them better.

… but right now?

they're not. Im not. My friends arent. My former work mates arent. The people left at these companies arent. The people being cut werent (except perhaps, at meta)

Its stock price hype theatre.

__alexs• 2 months ago

I disagree. Lots of people are so laser focussed at only the close to the code aspects of programming they are unable to leverage the enormous increase in scope it can offer them.

There is absolutely room for head count reduction while companies restructure around this.

religio• 2 months ago

we're not taking into consideration the new bottleneck: product growth. imo it's the growth/expansion of the product that creates new work and opportunities for more work. at the moment, product growth is human-driven--because it's a risk to take a product in any direction, and whoever makes it has to bear the full responsibility. ideas that cause product growth are still generated by humans (and rightly so), perhaps also augmented by ai.

there's also what the market is ready for. we've said that some products failed because they were ahead of their time. it's even more true now where the power of ai, ai productivity, etc could take the product far beyond the markets expectation. what does that lead to? the deliberate slow rate of growth means power/potentials have to be controlled somewhat. so even without hiring, if ai is adopted as a first-class tool within the organization, there will be surplus resources that need to be shed somehow.

fullshark• 2 months ago

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.

mschuster91• 2 months ago

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.

zozbot2343• 2 months ago

If you freeze the over-hiring, you'll still get people complaining about how there's no entry-level jobs anymore.

marcosdumay• 2 months ago

The AI story is a cover for the companies becoming less profitable in a bad economy, less able to invest because of the end of ZIRP, not capable of finding new markets, and developers becoming more expensive due to changes in accounting laws on the US.

People keep trying to make sense from the official story told by professional liars.

tristanj2• 2 months ago

One datacenter rack of NVIDIA Vera Rubin GPUs costs $8 million. That's about the same cost as a team of software engineers. These data centers are not going to pay for themselves.

skinfaxi2• 2 months ago

One datacenter rack of NVIDIA Vera Rubin GPUs costs $8 million. That's about the same cost as a team of software engineers.

How many engineers do you think that can pay for? At 100k/year that's a pretty huge team.

sailfast• 2 months ago

Where are you finding engineers at 100K/yr all-in? Also how many of them will be as good at coding as the models you deploy on the rack?

Also you need both now. It’s not enough to just have humans, and that OpEx needs to come from somewhere.

I’m not happy about it - just the way it is.

tristanj2• 2 months ago

A large team at Meta (16 people) would cost the company more than $8m/year. That is all-in cost, including payroll taxes, benefits, etc.

CivBase• 2 months ago

I still think AI is just a cover story for these job cuts. Tech companies are still "rightsizing" after unsustainable growth during the pandemic. At the same time we're clearly headed into a recession.

Investors like growth, not shrinkage. Claiming AI is replacing those jobs helps avoid the appearence of shrinkage, while also feeding the AI hype machine that many of these companies have invested heavily into.

dboreham• 2 months ago

Nobody ever knew what the right size was. There was a valve that was opened to allow hiring. And another "bung" that could be unplugged to facilitate firing. The algorithm was to open the valve when times are good/money cheap/greed is good, and opened the bung in other times. Totally decoupled from how many people (and largely what sort of people) are required. AI has changed that mechanism.

Shank• 2 months ago

The problem that software engineers and product teams often face is that the time from roadmap to feature is quite long, and AI has offered a clear, meaningful speedup to some parts, like writing tests and boilerplate. In many cases, the same ticket flow can be managed much faster with AI. So, what? We're not quite at the point where people have transitioned this into demand for more product deliveries faster. As soon as that occurs, it doesn't matter how great the AI is, because the current pace will be slow. Why stop at what the current roadmap is? Why not ask for double the features? When we gave everyone power tools that didn't dramatically make construction easier, it just enabled more complex buildings.

glouwbug• 2 months ago

Relatively speaking, a company could obtain AGI first merely by just by keeping their critical thinkers while the rest of the industry offloads their thinking to LLMs. It wouldn’t be AGI, just GI, like we’ve always had before before GPT arrived

LogicFailsMe2• 2 months ago

There are clearly defined tasks these things already do that are tedious and error-prone for a human. Using them correctly amplifies the abilities of humans. The problem is with the C-suite mentality towards cutting costs by replacing humans. It isn't going to work, but the only way they learn lessons like that is, as always, the hard way.

jordanb• 2 months ago

This is a pro-AI piece. They realized they overplayed their hands when college graduates started booing them and their new line is "AI won't replace workers, it will make them more valuable!"

koe123• 2 months ago

My 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.

raulparada• 2 months ago

Kinda playing devil’s advocate here but: if AI is a multiplier it makes (now more) sense to get rid of net negatives

rhplus• 2 months ago

Most businesses don’t grow just by churning out more units of software. At some point, it doesn’t matter how quickly you can churn out features if you’re not solving customer problems and convincing customers that they should pay for those solutions.

Once software becomes cheap, the bottleneck to growth shift to product design, infrastructure/manufacturing, sales and support.

gwbas1c• 2 months ago

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.

squidbeak3• 2 months ago

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.

fendy30022• 2 months ago

if constructing houses or buildings are quick, the bottleneck will be moved to other things. Like city planner, regulations / legals, material procurements, furnishing / equiments, etc.

for software it will be requirement gathering, product planning, looking for buyer / customer, even brainstorming on finding what to make.

reenorap• 2 months ago

Another bury-your-head-in-the-sand article. It sucks but AI replacing coders is very real. I haven’t coded since last year but I’ve pushed more features at a rate faster than I ever could in my entire career. I pushed new code while chatting on WhatsApp with my friends yesterday using 2 prompts.

“Remove this old feature.” “Are you sure you didn’t break anything?”

That was it. Then I manually tested it to make sure nothing was broken. Then I did a brief review before posting it for code review and then pushed it. What would have taken me probably about 1 day to go through and figure out code changes and then actually change the code took me about 30 seconds.

To think that we need to maintain the post-Covid hiring bloat is nonsense. I’m not so arrogant to think that someone with an llm can’t replace me, if I survive a few more years in this industry I’ll be amazed and grateful.

jdidrirjrjo2• 2 months ago

AI Does Not Replace Judgement. It Multiplies It.

And that is a problem. If you employ people whomlove to comlkain are basically minus 0.1 of regular employe (tolerable annoyance), they get power multiplier and instead of small rants at water cooler, will be able to file federal law suits under employers ass.

And they will also get way more ways to harrass productive employes.

fred_is_fred• 2 months ago

Companies are cutting headcount to fund AI projects, not necessarily because of the gains they are getting from it. And frankly in many companies, cutting layers and reducing team handoffs will be a net gain - even if AI didn't exist.

chank2• 2 months ago

Capitalists usually recoup gains rather than re-investing in people or working in new verticals. This gels with companies who would rather do anything else than grow.

jdidrirjrjo2• 2 months ago

We need stronger goverment and socialist revokution! Strong socialist goverment invest it to people! Socialist goverment would not starve people, torture, or just send them somwehere else (those examples do not count)

chank2• 2 months ago

Wasn't really trying to take the socialist view. Merely stating what usually happens. Grow the business usually means make more money in the easiest way possible (cost cutting usually) rather than invest in future gains.

elktown5• 2 months ago

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.

zipy1243• 2 months ago

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.

elktown5• 2 months ago

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.

disgruntledphd23• 2 months ago

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.

TeriyakiBomb3• 2 months ago

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.

WarmWash2• 2 months ago

AI aside, if we just look at other engineering disciplines in mature sectors, the future is not bright(er).

No fully paid golden cadillac benefits packages (for your dog too!), no twice daily uber eats comps, no $150k entry level, no unlimited PTO, no 6 months leave.

If you go to your uncles engineering department at the boiler company, these guy's engineering roles are about as pampered as the warehouse managers.

The upside is that it will cull those in it just for the money/lifestyle, and concentrate it down to those in it for the love of the craft.

Someone• 2 months ago

when I started at FB in 2013, they probably had […] about 10% of the sales people [they needed]

I find that hard to believe. Looking at https://www.macrotrends.net/stocks/charts/META/meta-platform..., they had a good revenue growth in the early ‘10s.

What did they leave on the table by not having more ten times as many sales people as they did? Revenues? Profits?

Curosinono• 2 months ago

FB is the weirdest company though. For a lot of companies like gitlab you know they have sales for customers, roadmap for their core product etc.

FB has what?

Intel has around the same number of people and they make chips, laptops, different types of chips. Hardware, software, supply chain etc.

FB does what? And what do they do with all these very well paid people?!

rdtsc• 2 months ago

That’s the true answer. AI is just used as an excuse for “oh shit, we over-hired, and it would be nice if we had an excuse to shed these people”. Then suddenly AI popped up, and well, that’s a nice excuse.

Returning to office was the previous excuse, so now they have the next one ready to go.

aidenn0• 2 months ago

A lot of places did over-hire, but I'm suspicious that those places will successfully cut the fat rather than the muscle.

gruez2• 2 months ago

which is how GitLab is like 5x larger than Valve.

Seems questionable to compare the valuation of a public company vs a private one, with the latter being marked to market rarely, if ever.

elktown5• 2 months ago

This was in relation to employee count, not valuation.

pj_mukh• 2 months ago

And moreover,

The headline is backwards, the companies cutting headcount for AI have already lost, that's why they're cutting. Most of these companies are losing market share or are in dying markets and need to cut headcount. They're just blaming AI because it's convenient and forward-looking.

burnte• 2 months ago

There are companies of a certain size that hold on to thousands of people they don't really need just so they can but them at a moment's notice to appease the stock market if bad news hits. It keeps talent out of their competitors, and gives them a cheat code if earnings dip or bad news hits.

stephc_int13• 2 months ago

I agree with both the gist of the article and your comment.

In the case of the well known FAANG and other similarly structured large software companies, everyone working there or having approached them know how bloated and inefficient they are.

What is happening is likely a long-term plan to completely restructure themselves, progressively shedding headcount while using it as a disciplinary tactic.

I am sure they understand the cost and the effect on morale.

But they are foreseeing radical changes and they want to be ready and slim before the storm.

tsycho• 2 months ago

I keep seeing this over hiring argument everywhere. What's the evidence for that?

And weren't the layoffs of 2023-24 supposed to correct that?

In my experience, in every big tech company for the past two decades, almost everyone always complained that they were understaffed to meet their goals/okrs.

IMO, the real explanation is:

- Some unprofitable companies don't want to raise money in a high interest rate world, and are using AI as a partial excuse, partial ambition to do layoffs to cut costs. Eg: NET

- Other companies are investing heavily into data centers (eg: META) and need to cut costs elsewhere to offset that.

And in both cases, there's some real productivity gains that they have already seen due to AI that will offset, plus they expect to see more gains as the remaining people will work harder and be more motivated to increase their productivity for job security.

hamdingers• 2 months ago

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.

elktown5• 2 months ago

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.

33MHz-i486• 2 months ago

I think it’s simplest to view these companies 2020s layoffs cycles through the lens of a political battle between executives and middle managers. Middle managers always want to grow ICs because it’s their main stake to higher title and more pay. Executives are the intermitten contra to this, with their incentive being tied to the stock (high growth at high margins). AI gave executives more leverage, productivity had gone up so they could fire more without compromising operations.

Its also notable that over the last few decades the business community has normalized layoffs and layoffs while highly profitable as net positive for the company (stock). While all the engineering driven companies, GE, Boeing, etc that pioneered this management philosophy end up in strategic decline.

conductr• 2 months ago

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.

nalekberov• 2 months ago

Not because they have fewer costs. Because they have more capability.

This kind of sentences are typically AI-generated. What’s the point of an article about AI generated by AI?

prewett3• 2 months ago

If the article is about the craft of writing, then no point. But if the article is about communicating ideas, AI is just the means the person with the ideas chose.

However, in this case I think both were fairly vacuous. Also, sentence fragments are a hallmark of bad writing that high school English teachers try to train you out of, apparently unsuccessfully if the training data makes them so likely.

pech0rin• 2 months ago

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.

prewett3• 2 months ago

I don't think software was ever sold as a high variance career. Start a startup! was sold that way, particularly by PG's early essays, but not not W2 employment. You do W2 because you want low variance, and you either love software or it pays well. Either way, I don't think most people were okay with terrible outcomes. (I don't think getting laid off is terrible, I think it should be an expected possibility. I've found that contracting/freelance has helped reduce my fear of losing my job, since you expect the job to end when you start it, and since you're regularly looking for a new job, you get a sense of how long it takes.)

TeriyakiBomb3• 2 months ago

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.

dgellow2• 2 months ago

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?

TeriyakiBomb3• 2 months ago

That's the less common third kind. late 10s tech spending was absurd, it's the same excuse as the first but again, an easier way to reduce Capex for staff they don't need.

techblueberry• 2 months ago

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.

thisislife2• 2 months ago

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

austin-cheney2• 2 months ago

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.

squidbeak3• 2 months ago

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.

austin-cheney2• 2 months ago

I know this is a common belief, but its an assumption lacking evidence.

brazukadev• 2 months ago

We will always have humans that are better at using some tool than others, this won't change with AI.

tayo42• 2 months ago

Has this ever happened? Companies are just keep going along. There's these consequences for things that hurt people

whazor• 2 months ago

A friend of mine works at big corporate. He is in meetings all the time and barely codes. For him a 20$ AI subscription is more than enough.

I'm personally at a fintech startup and have a 100$ subscription. Our org is much leaner and its much faster to ship stuff. What used to be entire departments or teams can now be done by two or three people. Three people to ensure we share context and have a decent tram factor.

gentlemanJosh• 2 months ago

Its a little odd that you think these two examples are comparable. How many customers does his product have and how many does yours?

Of course a leaner team can ship faster. But your stakes are much lower. A production bug has less visibility and impact. Limited revenue means less stakeholders, and less opinions about how and what to do in a startup. Less customers means less customer support and feedback. The differences go on and on. I'm not sure you can attribute all of that to AI assistance.

Good luck with your fintech startup. I'm in that space too and its a bear.

koliber• 2 months ago

The article makes a good point, but it's based on a polarized view that people make good judgement and AI is incapable of making good judgement.

I've worked with people who demonstrated below-average judgement, and I've seen cases of good judgement from AI. I think if a company can identify the poor performers and part wit them, there is a decent chance that the remaining people with AI in hand can more than make up the difference.

cmiles8• 2 months ago

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.

DrewADesign• 2 months ago

“Next quarter is next quarter’s problem. Let’s talk about bonuses.”

— Every every single current tech c-suite

iridione• 2 months ago

The companies cutting headcount because of AI often just aren’t creative enough to expand their portfolio. There, I said it.

Today, even someone with minimal context can ship end-to-end prototypes. That means existing employees, the people with actual domain knowledge should be able to innovate faster than ever. Anthropic has shipped one of the best coding agents on the market and still has hundreds of engineering roles open.

High-agency people with company context and ideas within each company should be getting amplified right now, not laid off. Instead they're stuck figuring out how to "tokenmaxx" because leadership mandated it and they are forced to ship software no one will use in order to keep their jobs.

matwood• 2 months ago

This right here. Big companies laying off engineers are basically saying our backlogs are empty and we're out of ideas. This should represent opportunity for small/mid companies to finally compete with the large competitors as some of the advantages of scale are normalized.

arttaboi• 2 months ago

I don't think any company is cutting headcount because of AI. I think that's just what they say. The reality is that they're facing a cash crunch due to a bad economy. And if you state a cash crunch as the reason, your stock will fall or VCs will run away. But surprisingly, if you state AI as the reason for layoffs, your stock will rise or VCs will get excited. Same thing, just different clothes, and it works.

yogthos• 2 months ago

That's absolutely correct. I use LLMs heavily in my work and open source projects. These tools are effective, they can solve hard problems and they allow me to work on a wider range of tasks than could before.

But, they're also jagged in terms of functionality. When you work with a human, you can learn what their core competencies are, and then if you give them a task that falls within that domain, you can be reasonably sure they'll finish it correctly. That's not the case with LLMs. It might do one task brilliantly, and a next similar task, it just shits the bed on.

And since it has no understanding of the task in a human sense, it can't self correct, learn or improve. All its doing is stringing tokens together based on probability. So, you need a human in the loop to review what it's doing, to correct it when it makes mistakes, and to define the actual goals. My experience is that doing all that properly ends up taking up a lot of time, so your actual productivity gain per person aren't all that significant.

Companies that try to replace humans with LLMs will soon find that they end up with a whole bunch of code that doesn't actually work, and they have no hope of fixing. The double edge of LLMs is that they're really good at generating a lot of wrong code really fast.

therealmacsteel• 2 months ago

Greed is the underlining issue.

rimeice• 2 months ago

It is the knowledge they carry. How the business actually operates. Where the edge cases live. Why certain decisions get made the way they do. What customers really mean when they complain about a specific issue. The context that never makes it into a process document because it does not need to — because the right person already knows.

I get this is about the immediate firing of people and losing knowledge quickly but there’s no reason this this knowledge can’t be captured actively and passively over the next year or so now there’s a massive incentive to do so. In fact using AI to capture this knowledge is a huge opportunity tons of startups are working on.

softwaredoug• 2 months ago

To take advantage of AI orgs needs to optimize for giving humans broader agency, not AI usage or skills.

These large companies aren’t well positioned for this. There’s too many human bottlenecks to every decision. You get in trouble for going outside your role. Thats why AI is drudgery at many of these places, often even negative productive.

Smaller companies though started assuming AI will let their employees stretch to broader roles, wear many hats, and given larger agency

mlsu• 2 months ago

These 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 AI” are layoffs for some other structural reason in the tech sector, or “AI makes employees way more productive” is total bullshit.

I don’t know which is the scarier lie tbh

mmmore• 2 months ago

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.

squidbeak3• 2 months ago

This is a simple economic fallacy. Your idea holds true if your business has room for growth, but you always need a market for those multiplied outputs. In an economy where every business has multiplied outputs, but demand doesn't scale with those outputs, what do you think happens?

jpadkins• 2 months ago

What's great about this article is it's a falsifiable hypothesis. Is anyone keeping a list of companies in different sectors not firing due to AI? We can revisit this in 2 years and see how we did.

ulfw2• 2 months ago

LOL who doesn't?

I don't know anyone who has been hiring in any kind of significant numbers. Everyone fires either because of alleged AI efficiencies or to pay for AI token shit or to just bla bla to investors how magically AI AI AI they are.

End result all the same. Massive job losses due to AI.

mrcwinn• 2 months ago

I once was the final step in an interview process. My flag to the team was that this person had been laid off something like four times in a row. I said, layoffs don’t cut the great people, so it says something about the applicant.

The team insisted this person had a big heart, a lot of passion, and they’d make a difference. We extended an offer and they accepted.

They ended up being unremarkable in every way. It was a drag on the company. We let them go a year later and set ourselves back on a topic our customers cared about.

Anyway, some people are great. Some are not. The idea that there’s this hidden special knowledge trapped inside teams, if only the executives would unleash it, is nonsense. I personally feel for anyone who loses their job, but companies will always pick the most productive and efficient path to a result.

Also so does the labor market. How many people, when given the option for more pay and benefits, decline out of loyalty to their employer? At least in tech, this is almost never the case.

I think we’re a bit lost. On one hand, certain people don’t trust these big employers and think they’re evil, and on the other hand really really want their job at said evil megacorp.

dosinga• 2 months ago

Does anybody else find this article reads really AI written? The way the argument is built, the emdashes, the dramatic one sentence paragraph:

"That assumption is wrong."

"The human is the equation. AI is what makes that equation run faster." -- what?

matheusmoreira• 2 months ago

The Atlas Interfaces drift alone in the endless void. They are silent. They are unknowable fragments of an ancient whole. Yet their imprint on time and space molds our existence. They are the equation, and life is its answer. Through their Monoliths they give understanding to their boundless meaning, and that of our own.

Testament of the Korvax, No Man's Sky.

pojzon• 2 months ago

I strongly believe sooner or later we will say any article was written by AI. How to trust someone it was not?

Does discimer “no tokens were used” mean anything ?

re-thc2• 2 months ago

Which companies are cutting headcount for AI though?

You mean companies blaming AI or using it as an excuse?

The real answer is stop reading the headlines or the fake news.

boh• 2 months ago

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.

thisisit• 2 months ago

I 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.

giancarlostoro• 2 months ago

I think we're forgetting the companies somewhere in the middle: letting employees use AI, and refine their internal process, and not wasting time on "tokenmaxxing" and just building better products, the companies you rarely hear about, because if you're doing things right people don't notice as much as if you mess things up.

dualvariable• 2 months ago

This is some hopium/copium that the corporate world will trend to being naturally fair and ethical.

Amazon was always an asshole-driven company which did topgrading layoffs annually at the start of every year. It has never suffered because of that.

scoofy• 2 months ago

All these articles make no sense to me even though I agree with them...

Why write this? If there is a theory that, right now, there is an economic advantage for folks working with AI rather than using it instead of workers, then why not frame it that way.

By framing the argument as a moralist ones, e.g., "ho, ho, you fools will be punished for replacing workers," then it makes the entire article feel like wishcasting rather than an actual argument.

aubanel• 2 months ago

This is AI-generated, but people upvote it despite its low quality because it generally rubs in the sense of "AI will lose"

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

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