I don't really get it. If AI is a force multiplier that suddenly makes your workforce way more productive, wouldn't you actually want to increase the size of your workforce to reap the maximum benefit?
There are only two reasons I can think not to. First, if AI can fully replace a human in a role. But it seems like we're a long way away from that. Second, if the added productivity leaves you with nothing to do. But we're in tech. There's always something new to do. If you're not doing new things as a company, you're getting replaced by those who are.
So it seems like a losing strategy to make your workforce cost reduction your primary concern when we could see the greatest workforce productivity gain in modern times.
Good news, everyone! I invented a new lubrication that increases wind turbine energy production by 10%. So we obviously want to decommission 10% of our wind turbines.
Same thought I had. Almost everything piece of technology that I use is broken in some way. UI bugs, connection issues, missing obvious features, missing non obvious features that might be specific to me, terrible UI, etc etc.
If AI is so useful that it can fully replace engineers or other humans, why aren’t products next level amazing?
If the barrier to entry for these high margin tech companies becomes so low that they no longer even need employees, isn’t the next step to compete on quality?
Because products never become next level amazing. Hardware got so fast and yet most software keeps getting bloated. Given a choice between writing near perfect software and cramming more features, almost all companies cater to more features (except in some rare domains or cases). Both because the latter is easier and because that's what people demand (not by their words but by their expressed preferences).
The market has reached an equilibrium of the minimum quality a business can get away with before customers switch away. Customers usually prioritize time to market or price before quality. There’s still a niche for excellent quality tech but you will pay much more for it.
1. Software issues are not merely technical, they’re human. Someone has to care about the issue and prioritize it and get it fixed.
2. Many products don’t compete on software because there are more substantive market forces at play.
AI won’t fundamentally alter either of these facts.
AI as a coordination multiplier would be interesting in large orgs — the AI assistant that trains on internal newsletters & minutes of all-hands says "I think you should loop John Doe from team X into this discussion because 1 year ago he ran point on something similar"
> I think you should loop John Doe from team X into this discussion
yeah, that's a useful thing that a chatbot could do...in theory.
in practice, from the recent CMU study [0] of how actual LLMs perform on real-world tasks like this:
> For example, during the execution of one task, the agent cannot find the right person to ask questions on RocketChat. As a result, it then decides to create a shortcut solution by renaming another user to the name of the intended user.
This just moves the coordination costs elsewhere, because more companies = more software = more hops to get things done.
Now, instead of Employee A and B working together to solve Problem X, Company A's product and Company B's product must be used together to solve Problem X. At least the employees know each other and are in the same "white box". But software products are a blackbox, so the end result is almost certainly worse.
True, but the large companies are incentivised to not see or accept that. I really don't think Jassy is thinking that he wants Amazon to be smaller so it has lower coordination costs. It will also have a smaller market cap, you know?
I'm on the board or a board observer for a couple companies (some public, some startups), and it is a bit of column A and a bit of column B.
The headcount growth during COVID along with the return of offshoring with GCCs was driven by the intention to speed up delivery of products and initiatives.
There are some IR games being played, but the productivity gains are real - where you may have recruited a new grad or non-trad candidates, now you can reduce hiring significantly and overindex on hiring and better compensating more experienced new hires.
Roles, expectations, and responsibilities are also increasingly getting merged - PMs are expected to have the capabilities of junior PMMs, SEs, UX Designers, and Program Managers; and EMs and Principal Engineers are increasingly expected to have the capabilities of junior UX Designers, Program Managers, and PMs. This was already happening before ChatGPT (eg. The Amazon PM paradigm) but it's getting turbocharged now that just about every company has licenses for Cursor, Copilot, Glean Enterprise, and other similar tools.
Yes! I'd imagine a lot of employees will just replace the SAAS that laid them off using AI to leap ahead or just jump ship to a competitor to do the same thing.
Thanks for reminding me to cancel my Prime. Logical comment!
This article/comment isn't really the prompt, just a reminder of that it seems like a shtty place to put my funds and I'll soon be using AI to replace it anyway!
There are only two reasons I can think not to. First, if AI can fully replace a human in a role. But it seems like we're a long way away from that. Second, if the added productivity leaves you with nothing to do. But we're in tech. There's always something new to do. If you're not doing new things as a company, you're getting replaced by those who are.
So it seems like a losing strategy to make your workforce cost reduction your primary concern when we could see the greatest workforce productivity gain in modern times.