AI and layoffs

Meta yesterday laid off 10% , or about 8000 of their global workforce. Probably some of my acquaintances were affected. I feel for them. I hope they saw this coming and are prepared. 

Layoffs and reorgs at Tech firms are not new. It has been happening since 20 years ago. 

So what's different this time?

Previous layoffs are mostly reactions to market dynamics and external economic situations. Think the DotCom crash, the subprime blow up leading to the great recession, wars, pandemics.  Also, move to cloud, where in-house IT shop workers were laid off. 

But this time round, it's a fundamental shift in how IT is delivered as service. Every IT shop now banks on AI to deliver services or most of it. This include creating the services itself (e.g writing a new application).  And then, such services will also replace the actual human workers that do the jobs today. e.g. translators 

The big tech like Meta, Microsoft, Amazon, they are showing the way now. They need to eat their own dog food, which is industry term for consuming what you produce. It's like Microsoft making its own staff use Windows Phone (what?? lol) , using its Bing search engine. But now, it's making their staff use their LLM agents that were borne from their in-house models. The tech giants are huge with easily 100k of employees, who are well educated and tech savvy, so it make sense to run your products through these folks to get real good feedback and iterate and iterate to compete. 

So, there had been reports of tech companies putting as KPI, the amount of AI tokens consumed by employees. This ensures each one is using AI for their "work". This indirectly trains the models to be better and better, and then...layoffs. You basically train your own replacement!

Somehow, this is quite similar to the early 2000s when outsourcing of IT services was all the rage. Enterprises IT heads where pressured to lower IT delivery costs, and vendors were eager to provide outsourcing services so they can grow and scale up into giant "body" shops. The outsourcing process required the existing in house IT folks to document everything, and then hand hold the vendor's staff for a few months. Once these vendors learned the ropes and take over, its lay off time for the in-house IT team, with a skeletal team of senior engineers and managements left to manage the vendors. 

This time round, the tech workers in big tech are being outsourced to AI agents. They trained these agents and get laid off. 

But it's worse. There is no place to go. Previously, laid off IT staff from enterprises can be offered similar positions at the vendors which outsourced their jobs, though most of time, there will be a pay cut. 

But what about now? Your job is replaced by an AI agent, which your big tech company could jolly well sell it to any other company anywhere in the world. You don't find a job again in the same role.

This is rather brutal. Lay offs are normal business cycles. But this time, you are laid off without a good chance of finding a replacement job unless you change your job role. The roles are gone, not just the headcount. 

Out of this burn, I believe new roles will emerge for others to take up. It's not easy for anyone who is 40 and above to switch to new role. 

The tech companies will continue to do well, as AI brings value to the economy. But this is a painful transition for many tech workers, especially software developers. 

Those not affected, be prepared. Do yourself a favour, start planning for it. 

Imagine what happens when AI and robotics merge. Even manual labor will be out. 

Will we reach a perfect world as described by some AI founders, where humans will no longer need to work and will just enjoy the fruits of labor done by AI???

All the assets and company owners, they provide goods and services, and if all these are produced mostly by AI, who will have the money to consume such products? The consumers don't have jobs and income!

So someone said, everyone will get a monthly spending credits as a basic human right. So who dishes out the credits? Who gets more?

The asset owners and company owners get more?

So rich gets richer and , worse, the rich now has full control of you. That's a nightmare to me. 

Maybe uncle is overthinking

I am not worried about myself, since I am retired. But I worry for my children.