You replace half of a team with AI. Salary cost go immediately down, but team output can keep up for some time. You don't see the technical debt, the security issues and the prompt injection which will result in wrong invoices being sent. In six months suddenly there will be a big problem, but this quarter a lot of shareholders are happy about the cost-cutting. You may even be promoted by the time shit hits the fan, and it won't even be your problem anymore.

On the other hand there probably also is a general correction in the market after the covid hiring spree.

Almost sounds like the "walking ghost phase" during radiation poisoning...

https://www.reddit.com/r/askscience/comments/1975oj/whats_ha...

This is such a good metaphor.

Fantastic analogy. I dare say it applies to our current economy as well.

You assume CEOs are completely rational actors.

The reality is most of them are so divorced from reality that they think they are infallible and AI will pick up the slack because they want it to be true.

No, layoffs happen due to leadership’s expectations. It’s never been about reality, layoffs and both massive hiring to ramp teams are based on vibes.

The lack of results is felt by those using it to assist with their work daily.

And specifically, their expectations as to what will positively impact the stock price. Shareholder value this quarter is more important than keeping the company afloat next quarter.

It can be both if for the majority of layoffs, AI is just a scapegoat to act as cover for cuts made for financial reasons or offshoring and not the actual cause.

But then you’d expect the trend to self correct in the long run. AI actually does seem to replacing customer-service and CS jobs effectively.

From what I've seen many efforts to replace roles such as customer service with AI are being rolled back or downscaled due to intolerably high error rates and general incapability. While these segments won't come out unscathed I don't think the actual impact will end up being as severe as feared.

I believe that too. Broadly, I’m agreeing with the parent comment—AI can’t be causing long-run layoffs and be worthless.

You're apparently assuming that AI related layoffs are rational, based on those making the decisions having good information about what their own organizations are achieving with AI.

I think this is far from the truth. In many companies AI has become a religion, not a new technology to be evaluated and judged. Employees are told to use AI, and report how much they are using, and all understand the consequences of giving the wrong answer. The CEO hears the tales of rampant AI use and productivity that he is demanding to hear, then pats himself on the back and initiates another layoff. Meanwhile in the trenches little if anything has actually changed.

> assuming that AI related layoffs are rational

Nope. I’m saying if firms lay off on the assumption of AI gains that never come, they’ll be beaten by firms who don’t.

OK, but your post reads as if you think that AI being the cause of layoffs can't be true if AI is "worthless" (less capable than they are assuming), which is false.

CEOs are laying off because of AI because they think it will save them money, but are doing so based on misinformation, largely due their own insistence that everyone uses AI, and report how much they are using - they are just hearing what they asked to hear (just like Mao hearing about impossible levels of rice production during the "Great Leap Forward"). I'm not making this up - I've seen it first hand.

You can see the proof of this - companies laying of because of what they mistakenly believe AI can do - in companies like Salesforce, forced to do an embarassing U-turn and hire people back when the reality sets in. At least Salesforce were quick to correct - most big companies are not so nimble or ready to admit their own mistakes.

We seem to have reached mania-like levels of rice-production reporting, with companies like Meta now taking AI token usage as a proxy for productivity and/or a measure of something positive, and apparently having a huge leaderboard displaying who is using the most (i.e. spending the most money!). The only guaranteed outcome of this is that they will indeed see massive use of tokens, and a massive AI bill, and then in a year or so will likely be left scratching their heads wondering why nothing much appears to have changed.

> your post reads as if you think that AI being the cause of layoffs can't be true

Sorry, I was unclear. Those statements can’t both be true in the long run. They can absolutely be true in the short run.

Might be true, but unfortunately, we need to pay for rent/mortgage/groceries in the short run.

Executives don't need actual results or data to lay people off.

AI could be a huge net benefit, and justify large layoffs.

AI could be a huge short-term benefit, justify layoffs now, so long as you (the exec doing the laying off) don't have to worry about the long term

AI could have middling net benefit, but be a great excuse to justify layoffs now. In this scenario, the people laid off and those that remain bear the cost (one, losing their jobs; those that remain, burning out with the extra workload) etc etc, many scenarios to consider...

When Block laid off 40% of their staff Jack Dorsey said it was because of AI. Whether or not you believe him is a different question.

He went all in on block chain, so it would be consistent with previous hyped tech. In this case I would believe him.

Not if the actual vs stated reasons for the layoffs have nothing to do with AI.

Organisations happy to reduce costs, perhaps with greater output but with lower quality?

and surely, all of those companies are being entirely truthful about the reason for the layoffs.

can happen at the same time when businesses speculatively fire workers to replace with AI. The lack of results might bite them in the ass and the bubble might pop. Or not, but they are going long on their AI position

AI hype -> layoffs -> AI underperforms -> ????

Hilariously, it's the exact same playbook as the big third-world-country-outsourcing hype from a few years ago.