Discussion
smithcoin: Cutting layers of bureaucracy not replacing with AI
napolux: AI as a real impact or more as an excuse?
PLenz: The public reason given for a layoff is always a self-serving excuse.
ttul: It’s the business cycle, mostly. During the pandemic, low interest rates drove a boom in risk investing that flowed downhill into tech company balance sheets. Of course everyone used the money to hire lots of developers and engineers - probably more than were needed for the business opportunity they were exploiting.I think AI is being used as an excuse for layoffs rather than the cause. Companies don’t have the cash and times got a bit too rich. This is the cyclical pull back that has been going on for decades.
bearjaws: And Meta has another round coming, soon the only thing left at the company will be data center staff.Apparently 20% to be laid off soon.https://www.reuters.com/business/world-at-work/meta-planning...
PlanksVariable: Surprised it took this long. I feel bad for the employees, but I can’t remember the last success they had. Metaverse, VR, throwing absurd money at AI and for what?
bwestergard: The framing of this makes it seem like this is a sharp change in trend, but this long-running layoff tracker shows no evidence of this.2020 and 2023 both had serious layoff spikes, but the 2023 spike trailed off to an asymptote that we're still hovering around.https://layoffs.fyi/
PlanksVariable: And for how many more years are we going to be calling this a post-Covid market correction?
joe_mamba: It takes time to correct 10 years of ZIRP plus COVID overhiring that doubled the headcount of those 10 years in just 2-3.
jameskilton: Mark Zuckerberg is no longer the kingmaker that he was during Facebook's peak, and he is desperately trying to create the next platform to be the one in power once again.It would be sad if it wasn't so unbelievably destructive to everything it touches.
chaostheory: [delayed]
win311fwg: There is never just one cause, but I do think AI is one of them.Not in some AI "dey took er jerbs" kind of way, but because businesses are turning their investment focus towards AI-related ventures, like building data centres, and less towards investments that require tech workers. Non-residential construction jobs, for example, have surged.
pokstad: Both. AI can help you be more productive with fewer people, but a growing company still needs many people commanding AI to expand into a market.
Lerc: In a very real sense these are still ripples from the death of Franz Ferdinand.
AnimalMuppet: Not in a very useful sense, though.If you can show that the death of Franz Ferdinand necessarily caused tech layoffs in 2026, I'll listen. I don't think you can, though.
doomslayer999: Let's do the government, and boomer welfare next.
mc32: I’m down for that. There are so many “facilitators” in middle management, some really good and quite a few bad ones and many making no difference. I don’t know how people thought they were good positions to hire for.Remember before Covid many a company deadweight showing us the vast amounts of unwork they did at their companies on their YouTube videos? Proudly showing how idle they were?Not all the firings are deadweight but a lot are. There is also a general tightening of budgets and people who are part of dead-end programs that are being let go. When the economy was hotter companies would keep these people to add at the margins; I think now that money is still tight they’re not keeping that luxury.
jjmarr: In a zero interest rate environment, literally any return on investment justifies spending.If interest rates are 3.8%, the company needs at least a 3.8% return every year on your yearly compensation to justify your job.
small_model: Mangers and executives have better tools now to track a tech workers output/performance, they will cut the useless/low performers/in over their head people who were hired during preceding years. A small tech team with proficient intelligent devs augmented with AI can replace 100's of duds.
Lerc: I think you could absolutely draw a causal link, it wouldn't explain why 2026 instead of 2024 or 2028.
simianwords: threads?
yacin: also just another clear ripoff. they copy, they acquire, but they cannot seem to innovate.
logicchains: It's not the boomers' fault, they were misled into believing the social security system they were paying into was a genuine savings system, not just a perpetual wealth transfer system from the young to the old.
bayarearefugee: Also, whether Covid is to blame or not, all these layoffs (not just the Meta one) contradict some of the most common rationalizations I've seen for how AI won't destroy the labor market but rather expand it.If there really is all this latent untapped need to drive a Jevron's effect software explosion that will keep developers employable, why would so many profitable companies be laying off so many workers into the transition?
abuani: Curious to see how they can turn moltbook into a money maker. Do they sell ads to agents?
cyanydeez: If you go into the larger field, the trend since 2021 is overall concerning, particularly if you factor in Trump's desire to just stop reporting: https://www.macrotrends.net/3208/us-layoffs-and-discharges
MSFT_Edging: you don't often see screenshots of threads posts on other sites like you do twitter/bluesky.
Retric: Not if they are compensated during the year.Grocery stores have slim margins, but if you make 10k after selling 1M worth of stock buy turn over that stock 12 times a year that’s ~12% annual ROI not 1%.
rishabhaiover: Google's projected AI capex spend is $170-180 billion for this year. It's unreasonable to think AI would not be a reason for companies to consider layoffs.
IgorPartola: There are two ways to interpret your comment:1. Google is getting so much productivity out of their AI that they need fewer people.2. Google is spending so much on AI they can’t afford to keep the people they need.
PessimalDecimal: I subscribe to the second point of view. Several companies fall in that bucket. Oracle comes to mind.
alexanderchr: You'd calculate return on investment based on invested capital, not on expenses, so this does not follow.
tayo42: Unemployed people, what are you doing?
mixmastamyk: Being ghosted, hazed, and otherwise abused. No one is hiring at restaurants, etc either. A recession has probably started.
paxys: Their last success was acquiring Instagram in 2012. Every new effort since then has been hemorrhaging money. They get away with it because they have two limitless money faucets in Facebook and Instagram, but their product strategy as a whole has been a disaster.
nickthegreek: Sure, but I’d argue that 140m dau, 400m mau is still success.
CoastalCoder: > Not in some AI "dey took er jerbs" kind of wayFWIW, I read this as equating a particular regional accent with stupidity.I imagine it wasn't intentional, but it's something to consider.
12_throw_away: Considering the overall impact of Threads, those statistics are certainly ... interesting.
ProllyInfamous: It would be incredible to think that Mark Zuckerberg genuinely thought their Metaverse/VR investment was going to be akin to Xerox's bayarea PARC campus (developer of modern networking / GUI &c). I guess both were ultimately profit-negative financial disasters.
Loudergood: Interviewing 4 times just to get ghosted.
rishabhaiover: Google (and almost all other BigTech) is spending on scaling compute (data centers/securing power generation/chip contracts). My comment was not related to AI producivity and its impact on reduction of workforce. I believe a company spending nearly all its free cash flow on scaling compute (or borrowing money to do so) would have a different opinion on the economics of human capital.
tim-projects: Meta seem fairly innovative. Their r&d labs seem to produce some really cool things.The basic issue is none of it seems to be making any money when it ends up in products and services.Main reason there seems to be that their walled garden approach is tolerated at best. They just aren't very good at it outside of a feed.
kypro: Their Libra cryptocurrency project is another example.
csimon80: My guess is data collection. Maybe the data can be used to improve or train agents.
coffeefirst: Some of this smells purely nihilistic. The market rewarded layoffs with higher stock prices, incentivizing more layoffs.
corysama: According to that chart 2021 was anomalously low and it has been linearly returning to normal for the past four years.AFAICT, the general populace is anxious about AI. So, the news knows they can get clicks with “You are right to be afraid. AI bad.” Meanwhile, CEOs know they can get stock boosts by saying “We are so AI we don’t need expenses. Infinite ROI!”Put together we’re getting a ton of scary reporting on what looks like a quite normal business cycle. And, everyone being afraid to hire is the only thing actually making it self-fulfilling.
jordanb: Watching their demo video was the perfect encapsulation of "this was not made for users" I have ever seen. First of all the idea of hanging out in a digital world with Mark Zuckerberg is so bleak. I can't imagine a worse hang.But other than that, it was all about working in a digital office, being advertised to, etc. They had this scene where one of Zuck's definitely-real friends is excited about "this new street art" on the digital wall that jumps off the wall and they interact with it. Imagine having popup ads that jump up at you when you're walking (gliding?) down the street!
badgersnake: It’s a lobbying firm now isn’t it?
avidiax: How were they mislead?From day one, Social Security was a "new money pays old money" scheme, the one thing that makes it Ponzi-like.To be fair, the boomers got screwed in the 1980's SS reform to pay for their parents (but had it sweet before), so maybe this is just paying it forward.
10xDev: It is somewhat integrated to Instagram with billions of active users. Not saying a whole lot.
bogzz: Well yes, Meta even said so explicitly about their upcoming layoffs. They're offsetting the capital expenditures into data centers, and "preparing for greater efficiency brought on by AI-assisted workers".
RealityVoid: So who is getting that money then? Contractors building sites? Is it going off to the silicon manufacturers? Is Nvidia getting a large part of the pie?
camdenreslink: Many companies really got bloated during COVID. From what I can see online, Meta doubled their number of employees between 2019 and 2022. How long does it take to correct from that amount of hiring?
dd8601fn: Some of these companies have increased headcount since their post-COVID cuts.Some of this has nothing to do with COVID boom numbers. Some are bailing water as fast as they can (Atlassian, et al), some are treading water and betting on future returns from AI (Block), etc.
doomslayer999: It was really FDR who abused wartime power to make a constitutionally illegal program. Now we’re in a complete demographic mess which is basically unsolvable because the pyramid is inverted.
tinyhouse: That's going to happen in all of big tech (already happening at Amazon and Microsoft). These companies have too many employees. It was never really justified and with AI even more so. I've been in big tech and directors often tell everyone to hire when they can rather when they need. For example, if they know a hiring freeze is coming, they will try to hire as many people as they can before it happens. It's rare to find people in big tech where their incentives align with the company. (and the blame is not always on the people themselves)As for Meta, I give Mark credit for trying, even if he failed so far with all the VR stuff. The main disappointment is about Llama cause it's clearly an execution problem. With Meta's investments in AI throughout the years, not being able to compete with Anthropic and OpenAI is a big failure.
bayarearefugee: Or3. Google is spending so much on AI that they can't afford to keep paying people, but they are ok with this because they are convinced the AI investment will replace the people at an eventual cost savings.
dd8601fn: That seems to have been Dorsey's approach. The business has been stagnant, so cut the roster and bet big on some future returns from AI.
HDThoreaun: I dont think zuck cares especially much about the stock price. He's certainly not beholden to any shareholders. He's doing this because he genuinely thinks it will help the company to trim the fat.
apatheticonion: I was laid off from Atlassian this/last week. Since then I've been playing Satisfactory for 12 hours a day.Crazy thing is, I delivered optimizations that saved 1m USD over the last 12 months, with another optimization in-flight that would save another 1m USD. I thought that was enough to protect me from layoffs/PIPs - I guess no one was counting.Internal survey showed that people saved a self-reported average of 4 hours per week using AI - which sounds about right. AI is just an excuse for layoffs which IMO CEOs are trying to use to recover share prices from the SaaS-pocalypse. Looks like layoffs aren't hitting the same for stock prices as they once were.
doomslayer999: Your problem was that you tried doing work. What you want to do as an employee is make it so they can’t fire you not that you are actually useful.
throw-the-towel: I do.
js8: I have an explanation (or rationalization, if you wish) for this.The AI caused the developer productivity to increase (similar to other two big SW engineering productivity jumps - compilers and open source), which gives them more leverage over employers (capital). Things that you needed a small team to build (and thus more capital) you can now do in a single person.In the long run, this will mean more software being written, possibly by even larger number of people (shift on the demand curve - as price of SW goes down demand increases). But before that happens, companies have a knee-jerk reaction to this as they're trying to take back control over developers, while assuming total amount of software will stay constant. Hence layoffs. But I think it's shortsighted, the companies will hurt themselves in the long run, because they will lay off people who could build them more products in the future. (They misunderstood - developers are not getting cheaper, it's the code that will.)
mothballed: FDR essentially pioneered the modern use of the omnibus bill by threatening to veto any assistance to the poor/elderly that didn't include social security. Basically his goal was to make the poor starve if social security didn't pass, and blackmail politicians into being forced to vote for it.Of course this was all predicated on the other prong, which was the 'switch in time that saved 9' where he also threatened to pack the courts to ensure it was found 'constitutional'. FDR was quite ruthless in his destruction of constitutional and democratic controls, and now so much of our government depends on it that it's effectively politically impossible to unwind.
whatever1: The money tree is over. Companies now have to pick between gpus and employees. They picked gpus.
