The real reason for tech layoffs: to invest in AI | Hacker News Reader

The real reason for tech layoffs: to invest in AI

sfgate.com

28 pointsjnathsf14 comments

Three hundred years ago, they would have been trying to free up cash to invest in tulip bulbs.

It’s a brutal reality of laying off displaced workers to free up cash to invest in tech: bank tellers for ATMs; DBAs for RDS; factory workers for robots.

This fails when the hype doesn’t meet reality - shift back to cashiers from self-service checkouts as an example.

I think we’ll see something similar in AI where many companies will have over rotated and will end up rehiring sales, marketing and other roles that we thought AI could replace.

Unrelated to ai, but I once had a so bad experience with self service checkout in one of the major supermarkets in Italy, I wrote an email to their customer service detailing all the bad things I could think of that they could improve. Worst thing is they behave in different ways whether you're on the checkouts on the left or on the right side of the wall. Many friends told me it was too much writing an email, but many had same frustrating experiences as me

Did anything come out of that?

Sorry for the late reply, i guess hn doesn't show replies so I sometimes check my comments on my profile to see what's up (tell me if there's a way to be notified)

They replied something in the lines of "we sent your considerations to the department concerning buyings these things. We'll let you know" and then they didn't let me know

> factory workers for robots.

Except in this case it is like laying off the factory workers at the robot factory before the robots are built. Investing in AI still means investing in tech people to work on AI, but that's who just got laid off...

One might be inclined to think that it is a freeing up of dead weight accumulated during the COVID hiring spree, but we also know of industry-recognized people deemed very talented, who should be prime candidates for AI investment, that were let go, so...

Eh, the "tech people" who've been laid off range everything from graphic designers to project managers to marketing, sales, HR etc, almost none of whom have any skill overlap with the engineers, mathematicians and scientists building AI.

There are a small number of CS-degree holding software engineers or statistical expert data scientists who can pivot into AI with a fairly direct application of their existing education and experience, but the vast majority of people who were laid off from "tech companies" do not have that background.

It would be cheaper to just send them all on a month long training course than re-hiring.

You'd think for all the lip-service given to how employees are their most valuable resource they would at least consider re-training. Some developers (myself included) have zero interest in LLM-hype train and would gladly take a severance package, but others would certainly want to up-skill and they already know the culture and company. Seems much cheaper than fire/hire.

It's funny they want to invest cash in AI for future cash flows - when future humans will not have any jobs to feed that cash flow with.

It's slavery economics all over again. The geopolitics will shift to controlling select consumer markets and the best geography for keeping production and logistics costs low since globally there will be overproduction and underconsumption. Mercantilism in other words.

This is not investment, this is human divestment. These orgs are betting they can deploy AI to replace humans.

In some cases, they'll probably have false positives: they were already bloated, and the missing staff were just doing the mythical man month.

In other cases, they'll probably claw back hiring as AI turns out to be a force multiplier but the force is at some orthogonal angle to the human labor that's most valuable, eg, mediocre programmer gets unstuck quicker, but still writes buggy code.

In further cases, they just fucked themselves by chilling their staff and sassling managers with the most desperate and mediocre employees. Eg, no one is available to debug the now more efficiently produced but still buggy code.

Odds of any of these orgs successfully streamlining work flow is low because ultimately, these layoffs are inline with trying to raise shareholder value when money is no longer cheap so you can't just go buyout competitors or novel business plays. AI is just a rationale to paper over jack Welches legacy.

> The billionaire executive said in the memo that more people might lose their jobs later in the year.

"I'm sure you understand that sacrifices must be made in order to prop up our stock price."

Bring on the next stock repurchase that could have paid those employees' salaries for the next 20 years.

The money for stock repurchase is profit, which the stockholders prefer to get, rather than be used to fund employees that may not earn more profit (or at least not quickly enough).

Reply on news.ycombinator.com