What if Tech Company Layoffs Aren't All About AI?

"Running a Big Tech company during Silicon Valley's AI mania may not necessarily require fewer workers or cost less," writes the Washington Post: Amazon, Google and Meta together have roughly the same number of employees now as they did during an industry-wide hiring binge in 2022, company disclosures show. Growing costs for technical workers and related expenses have often outpaced sales recently. The tech giants' big AI bet hasn't yet paid for itself.

That means AI might be killing jobs not through its labor-saving wizardry but by increasing spending so much that CEOs are pressured to find savings, giving them cover to consciously uncouple from their workforces. Marc Andreessen, a prominent start-up investor and a Meta board director, put it bluntly on a recent podcast. Big company layoffs are a fix for overstaffing and changing economic conditions, he said, but AI provides a convenient scapegoat. "Now they all have the silver bullet excuse: 'Ah, it's AI,'" he said...

"Almost every company that does layoffs is blaming AI, whether or not it really is about AI," Sam Altman, CEO of ChatGPT owner OpenAI, said at a March conference when he listed explanations for AI's unpopularity in the United States.
"Recent history suggests Big Tech companies might not be moving toward a future with fewer workers," the article concludes, "but recalibrating to spend the same, or more, on different people and projects."

So in the end, "AI might soon reduce hiring," the article acknowledges, "But the reluctance or inability of the largest tech firms to cut too deeply so far could also show that the path to making a workforce AI-ready — whatever that means — isn't a predictable straight line charting declining headcount."

Oh My God, this can't be something that's NEW

[Excelcia]

The idea that all the "AI layoffs" aren't actually because of AI, but are snow jobs... I thought this was so blatantly obvious as to be a tautology. This can't be something that is just dawning on people, can it? Please tell me that this has been obvious to most people who can rub two thoughts together in a row.

Re:

[rudy_wayne]

The idea that all the "AI layoffs" aren't actually because of AI, but are snow jobs... I thought this was so blatantly obvious as to be a tautology. This can't be something that is just dawning on people, can it?

I'm already starting to see stories that companies are cutting back on AI because its getting too expensive and they are finding that it is cheaper to just use people.

Re:

[martin-boundary]

"People are the OG AIs"

Re:

[drnb]

The idea that all the "AI layoffs" aren't actually because of AI, but are snow jobs... I thought this was so blatantly obvious as to be a tautology. This can't be something that is just dawning on people, can it? Please tell me that this has been obvious to most people who can rub two thoughts together in a row.

It's obvious to some, those who were actually taught critical thinking and to take what they read with a little skepticism if no credible data is accompanying a claim. I guess I should add people that also understand correlation and causation.

To those who lived through tech bubbles, who saw tech giants giants rest on their laurels and decline, who saw management focus on Wall Street rather than the market, ... sensing a convenient scape goat was something that may have come to mind.

corporate budget allocation

[will4]

AI is the once in a decade opportunity for corporate leaders to cut the budgets for legacy SaaS systems and other sacred cows.

AI is just the latest excuse acceptable to Wall Street that corporations can use to blame for lackluster revenue and blame for layoffs.

The question we and Wall Street should be asking of the bottom 450 of the S&P 500 is why is revenue not increasing as fast as inflation? And then follow by, "How is cost cutting, paper shuffling operations like stock buybacks to make financial nu

Re:

[FlipperPA]

TRUTH! A lot of us have been screaming this from the rooftops for a very long time now. Exhibit A: https://www.youtube.com/watch?... [youtube.com]

Re:

[ambrandt12]

Why would you "layoff" (fire) a whole wing of the building?
Are they gonna do some crap, like only hire occasional workers when "they have the idea down pat" and "we announced it'll be on the shelf in three weeks", and the programmers become prisoners with two weeks to make it work?

Re:

[Anonymous Coward]

Yes, plumbers, electricians and healthcare workers do work that is real and necessary. But there are 330 million people in the U.S. They can't all be plumbers and electricians and doctors. And chiropractors are a scam that shouldn't be allowed.

CEOs want to eliminate as many employees as possible because that means increased profits, which translates into the CEO getting a big raise. They believe that A.I. may be the magical solution they've been looking for. I think it will probably turn out to be

Re:

[0123456]

Healthcare doesn't exist without a real economy making stuff to fund it. And most of healthcare is not necessary.

Until the 20th Century, no society in history had to spend 20% of its income just keeping people alive.

Re:

[Bu11etmagnet]

> CEOs want to eliminate as many employees as possible because that means increased profits, which translates into the CEO getting a big raise. They believe that A.I. may be the magical solution they've been looking for. I think it will probably turn out to be wrong.

They will get their raise, bonus, and severance package regardless.

Re:

[gurps_npc]

There are several studies that indicate that AI is bad at taking low level jobs, but can totally decimate managerial jobs.

No one is foolish enough to think the CEO's and Presidents will go fire themselves, but some expect VP's and everyone down to middle management are going to be the first ones out the door.

Re:

[PCM2]

Or, if working as a health care professional has ever crossed your mind: try Chiropractic College! After an undergraduate degree (and even that isn't always necessary), you can become a Doctor in 3-4 years depending on which chiropractic college you attend.

And that should tell you all you need to know about how much your "doctor" degree will be worth.

Re:

[ambrandt12]

Don't worry, an AI-controlled robot that can fix plumbing or electrical or hang drywalll or build a house is in the works someplace... what's stopping it?
And, don't worry... soon, we won't need chiropractors... we won't have jobs where we have to lift that drywall or haul that toilet up a flight of stairs or heft that reel of power cable around. We'll be the Blob-humans from Wall-E.

Soon (sooner than you might think), someone will design an AI house-building robot (back a trailer onto the property, trailer

Re:

[0123456]

There's no need for the robot to be AI-controlled when a foreigner can just connect remotely and do the work for $2 an hour.

Re:

[Tony Isaac]

A doctor's job is AI-proof!

Maybe not. https://www.theguardian.com/te... [theguardian.com] "AI outperforms doctors in Harvard trial of emergency triage diagnoses."

Re:

[karmawarrior]

I get the impression most people here didn't spot the joke in the reply.

(The clue is in him hyping both AI and chiropractory, both mostly phony fields, for those missing it)

layoffs happen because

[FudRucker]

Employees are like cattle as soon as you make the profit quotas for your corporate overlords for the year then your job is up for review and if you're expendable then you get laid off or fired if they can come up with a good enough reason to fire you, the people you work for don't give a damn about you and your family

What if the smoking gun wasn't fired?

[BrendaEM]

Filed the article under: paid for by AI supporters.

There is no general solution.

[couchslug]

There are only individual adaptations whose outcomes are not guaranteed. Be genuinely versatile for your own benefits. If all you do is one "job" then you're helpless without it.

That's why I have zero economically useless interests or hobbies. If one makes the effort it's not difficult to learn to repair, modify and maintain nearly everything you own. Any techy should enjoy that stuff and many do.

If you're smart enough to be competent using computers you're smart enough to learn vehicle repair, home maintenance and repair and much more. Tools often pay for themselves at first use. No need to be deterred by lack of space. I and many others who lived in dorms and barracks while doing all our own vehicle work are proof. Learn one discipline and you'll soon notice related uses for your learning.

Unemployment may take you off your job but skills can buy time to adapt and change. For example my businessman neighbor was a skilled wood worker for the fun of it. When he lost his job he kept up his house payments (not cheap in the NY metro area) doing handyman work, cabinetry etc for several years. Without his hobbies he and his family would have been homeless. While I'd not want to do auto mechanics as a career it's saved be buckets of cash over a lifetime, ensured I never went without a vehicle and was able to help others who in turn helped me. Life is a team sport and being capable is a fine way to meet other capable, interesting humans.

Re:

[NotEmmanuelGoldstein]

Life is a team sport ...

That's not the lesson your monologue gives: It's, men are valuable as long as they make something. Which points to the problem, if his skill-set can no longer be monetized (replaced by automation/AI, or a lack of; tools, seed capital or demand), his future is living under a bridge.

It's very practical to avoid "economically useless" but most of us enjoy something first, or at least, enjoy learning about it, then learn to get good at it. Then there's industry lobbyists pretending they need more people to

"Uncouple"...that's a new one!

[Tony Isaac]

CEOs are pressured to find savings, giving them cover to consciously uncouple from their workforces

So, a new corporate-speak buzzword has been born. Is it actually better than "reduction in force"?

Avoiding accountability is all too human

[tiqui]

People love to shift the blame for bad results away from themselves and their actions; it's very human (unfortunately).

Members of congress do it by passing laws that create some executive agency and then grant that agency the power to write "rules" that will be enforced as though they were laws. This makes it so when the FAA or the FCC or the EPA etc clamps down on somebody, and it gets the attention of the public and the public seems not to like it, the congress members can point at nameless, faceless, une

Wage suppression, duh

[sinkskinkshrieks]

It's all about hollowing-out a professional class that was once a secure, upward mobility career. The biggest mistakes of tech workers are the low rates of unionization and the failure to start employee-owned co-ops that don't depend upon the whims of greedy, parasitic, billionaire assholes.

That's the common wisdom atm

[unami]

It's a common journalistic technique to "play dumb" in order to "disclver" something or reveal some "new" insight. We all know that AI hasn't replaced IT workers, but I see a vonstant, relatively obscure shift in other areas like law and other data-driven services that might have a big in the future.