>A lot of the fired then make a Discord and casually replicate the company's product.
And they find out replicating the product means little, it's the customer base, industry reputations, connections, support, ecosystem, and stuff, that matter.
Companies that conduct these layoffs don't just lay off developers. The tend to also lay off support, sales, legal, etc... Especially support, a chatbot is all you need right?
And that's how that "layoff Discord" can produce something that can matter to customers. It will be a smaller company, and small companies have a serious advantage when it comes to support: you can get an actual human, maybe even the main dev, he can actually do things rather than transferring you from chatbot to bureaucracy. It doesn't scale, but it may be enough to get a competitor started.
As for connections, you may have inadvertently let go of the guy who has the connections. And you may have fired a perfectly functional team, ready for from clever entrepreneur with connections (who may be one of the fired) to pick up. It is so much of a recognized problem that some big companies hire people just so that their competitors can't have them.
Who is going to fund these smaller companies? Why do you think this isn't happening right now as we speak? Where are these companies made from these layoff discords in the past two or so years?
What makes you think it is not happening right now? Startups have to come from somewhere, and they don't have to say how they got together, in fact, it would be smart for them to keep that "layoff discord" hidden if it can keep the lawyers attention away.
And we here stories of "guy left big company to make his own startup" all the times. It is a common story for indie video game devs for instance.
> What makes you think it is not happening right now?
The fact that they don't exist? You have to prove that they exist to make your point, and so far nobody's been able to actually prove their existence. And I'm speaking from direct, professional experience here.
Those stories if you notice are mostly from decades ago, or are from the wealthy csuite deciding to start their own company with rich connections. AI has supposedly accelerated massively in the past two years yet we haven't seen startups appear at that same rate, even with the level of layoffs in the industry. Well outside of AI startups all looking to buy shovels for gold.
> some big companies hire people just so that their competitors can't have them.
True. Also true that this was ZIRP phenomenon predominantly in big tech. And once mass layoffs started in big tech most of those ultra elite engineers/staff either retired or took job at lower pay instead of launching competitors to big tech.
And then the business learns how many of their customers were only there because of the sales rep, and jump ship to go to whatever vibe coded app the sales rep makes to specifically handle their "unique" environment.
I wonder if what we'll see instead is smaller startups replicating whole consumer value chains and replacing the whole industry at once.
On the B2B level, business is basically relationships, because you want to have a person that you trust who you can go to with any concerns about your multimillion-$ relationship. The relationships are the hard part, which is why the biggest department in any enterprise startup is sales, and requests from the salespeople usually dominate the feature roadmap.
But on a consumer level, most companies invest precisely zero in relationships, because it is far too expensive to build a relationship with 300M consumers who each pay you $50/year. The parts that matter are a.) building a brand image b.) delivering a "good enough" product and c.) doing it cheaply.
AI does extremely well at all 3 of those. It's great at generating fictitious but plausible-sounding content that makes you feel great about yourself. It's a passable approximation at explaining how things are made, enough that a small organization could probably deliver a good-enough product. And it replaces all of those pesky humans that require HR departments and legal employment contracts and sales relationships and customer service. A significant portion of the work in any industry is simply greasing the supply chain, making all those transactions that need to happen along the way happen. Vertically integrate and automate those and you could probably rebuild the industry in a much cheaper, more efficient way.
I think many people are thinking too small with AI, on the level of "how will this help me do a task?" or "how will this help my job?" or "how will this help improve my company by getting rid of jobs?" The real money is in "how will this revolutionize the industry by getting rid of all the other companies?" or even "how will this replace society so there is a fair playing field for new industries to get started?"
And they find out replicating the product means little, it's the customer base, industry reputations, connections, support, ecosystem, and stuff, that matter.