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Comment by zazibar | Hacker News Reader

A month ago the company I work at with over 400 engineers decided to cancel all IDE subscriptions (Visual Studio, JetBrains, Windsurf, etc.) and move everyone over to Claude Code as a "cost-saving measure" (along with firing a bunch of test engineers). There was no migration plan - the EVP of Technology just gave a demo showing 2 greenfield projects he'd built with Claude Opus over a weekend and told everyone to copy how he worked. A week later the EVP had to send out an email telling people to stop using Opus because they were burning through too many tokens.

Claude seems to be getting nerfed every week since we've switched. I wonder how our EVP is feeling now.

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Pretty bad decision on his part. I've been telling other engineers within my company who felt threatened by AI that this would happen. That prices would rise and the marginal cost for changes to big codebases would start to exceed the cost of an engineer's salary. API credits are expensive, especially for huge contexts, and sometimes the model will use $200 in credits trying to solve a problem that could be fixed in an hour by a good engineer with enough context.

It kind of reminds me of the joke where a plumber charges $500 for a 5 minute visit. When the client complains the plumber says it's $50 for labor and $450 for knowing how to fix the problem.

A good lesson for all - I always really liked the Picasso version:

In a bustling restaurant, an excited patron recognized the famous artist Picasso dining alone. Seizing the moment, the patron approached Picasso with a simple request. With a plain napkin and a big smile, he asked the artist for a drawing. He promised payment for his troubles. Picasso, ever the creator, didn’t hesitate. From his pocket, he produced a charcoal pencil and he brought to life a stunning sketch of a goat on the napkin—a clear mark of his unique style. Proudly, he presented it to the patron.

The artwork mesmerized the patron, who reached out to take it, only to be stopped by Picasso’s firm hand. “That will be $100,000,” Picasso declared.

Astonished, the patron balked at the sum. “But it took you just a few seconds to draw this!”

With a calm demeanor, Picasso took back the napkin, crumpled it, and tucked it away into his pocket, replying, “No, it has taken me a lifetime.”

>That prices would rise

Competition will prevent that from happening. When anyone can host open models and there is giant demand for LLMs companies can not easily raise token prices without sending a lot of traffic to their competitors.

> When anyone can host open models

They'd still need to pay the actual power costs.

I didn't say that inference would be free, but that everything to do inference is a commodity which means that competition is easy to do.

It seems very unlikely that prices would rise in the long term. Yes, RAM and GPU prices are suddenly going up due to the demand spike and OpenAI's shenanigans, but I doubt it's going to last very long. Some combination of new capacity and reduced demand will most likely put things back on the usual course where this stuff gradually gets cheaper over time. And models are getting better, so next year you can probably get the same results for less compute. That $200 in credits becomes $150, then $100, then....

> the model will use $200 in credits trying to solve a problem that could be fixed in an hour by a good engineer with enough context

So the price for fixing the problem is equal. Sounds like a great argument for AI.

99% of software developers earn less than 200 USD a hour

That “with enough context” is doing a lot of work here. If you take a great engineer, drop them in front of an unfamiliar codebase, it’ll take them more than an hour to do most non-trivial tasks.

Most good engineers are way cheaper than that. The world is bigger than the united states.

Equal sounds like a terrible argument given all the other problems with replacing engineering thought with ai. I don't know where the line is but I expect it's far beyond equal AND there needs to be a level of "this can debug effectively in production" before that makes any sense for a real business case.

Even if you take it as true that prices have risen recently, and may continue to rise as the VC subsidies dry up, they will fall again long-term. Inference will get more power efficient with model-on-chip solutions like Taalas and God willing we will get cheaper and cheaper renewable energy.

Despite this I don't think engineers should feel threatened. As long as there is a need for a human in the loop, as today, there will still be engineering jobs. And if demand for engineering effort is elastic enough, there could easily be even more jobs tomorrow.

Rather than threatened, I think engineers should feel exposed. To danger, yes, but opportunity as well.

Increased demand will not drive down energy costs.

Of course not necessarily, but I keep seeing articles about how wind and especially solar power just keep getting cheaper.

Why not?

I can’t believe how many small to mid size companies are being destroyed by bad decisions like this.

A friend’s company fired all EMs and have engineers reporting to product managers. They aren’t allowed to do refactors because the CTO believes the AI doesn’t need organized code.

How do people like that ascend to CTO?

CTO is in many cases a rank more than a role, and given out accordingly. You should never take someone seriously based on their rank alone, much less a CTO.

The Peter Principle: https://en.wikipedia.org/wiki/Peter_principle

Or more cynically they reach their level of competence, go one level further and stay there to keep them from ruining the productivity of the people doing the work...

He must be feeling pretty good, after all he still believes that it was the right call, and he definitely won't be admitting a mistake.

There's 0 chance of him facing the consequences for it either.

But cancelling IDE subscriptions? You need a proper IDE to along side AI augmented development unless you want to simply be along for the ride.

Well, you can resubscribe in an afternoon. The fired workers? No real recovery from that.

`git diff` is probably all you need.

Free VS Code is probably fine

I'm using the JetBrains IDE's and it's definitely worth paying for, even in the age of AI.

These are like $20-50 subs, you’re probably paying your dev a hell of a lot more. Let them use the tools they want. I spend almost all of my time in Emacs or Cursor, but I still haven’t found a database client that I like better than Datagrip.

A database client better than Datagrip is a tough one, yet I'm attempting to do just that [1] :).

I'm in month 4 of development, working on it full-time.

[1] https://seaquel.app

Hopefully that EVP feels embarrassed that a big bet was made that not only didn't pay off but left the company in a worse position. Some schadenfreude may be all you can expect, since this is an executive.

Wow, that sucks. Getting Claude for everyone wasn’t even the stupid thing, it was thinking that a shiny new hammer meant you could throw away all your wrenches.

Should have started slowly instead of being so aggressive with it.

lol. dude is so incompetent. changing tool for cost cutting is so stupid, we all know real cost cutting is firing people. if he is really good at he's doing, just fire 10% people and replace them with his Claude. If that didn't get backfired in 3 months, he will be CT0.

Wow, that sounds like you have a astoundingly terrible EVP.

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