Employee count seems to correlate to stock market incentives - which is how GitLab is like 5x larger than Valve.
It's funny to me that everyone talks about pandemic over-hiring, as if this hadn't been a thing for a decade before that. Like, when I started at FB in 2013, they probably had about 75% of the engineers they needed (and about 10% of the sales people). But they grew engineering much faster than sales for some reason (engineering in the broad sense including data and product).
That being said, it's easy for people to look at other parts of a company and think they are over-staffed, because we don't see all the work necessary to keep the balls in the air.
No fully paid golden cadillac benefits packages (for your dog too!), no twice daily uber eats comps, no $150k entry level, no unlimited PTO, no 6 months leave.
If you go to your uncles engineering department at the boiler company, these guy's engineering roles are about as pampered as the warehouse managers.
The upside is that it will cull those in it just for the money/lifestyle, and concentrate it down to those in it for the love of the craft.
1) Unlimited PTO is a scam. Ask anyone who ever got paid out six weeks salary when they changed jobs.
2) “the craft” is doing some heavy lifting here. I happen to enjoy AI-assisted dev, but it is nothing like the work that drew me to the industry.
Otherwise agreed on all counts.
Is that what you see at your uncle's boiler company? People who are truly in it "for the love of the craft"?
But isn't tech a bit unique in how accepted this kind of self-serving corruption is at pretty much all levels? From the "This might require a few extra folks, but I want to pad my resume" IC level all the way up to "Let's make this look good for Wall Street" exec level.
I do think tech certainly has its own flavor though, particularly because of how differently it is treated by investors.
The headline is backwards, the companies cutting headcount for AI have already lost, that's why they're cutting. Most of these companies are losing market share or are in dying markets and need to cut headcount. They're just blaming AI because it's convenient and forward-looking.
Returning to office was the previous excuse, so now they have the next one ready to go.
Seems questionable to compare the valuation of a public company vs a private one, with the latter being marked to market rarely, if ever.
You see this in enterprise consulting, wiht the increase in cloud, serverless, SaaS/iPaaS, low code/no code, content generation and translations, followed by AI agent orchestration, the teams can be reduced down to about 1/3 of what they used to be.
It isn't as if there are enough projects around to keep the other 2/3 busy, so eventually when there are enough of those people on bench they have to find something else.
> It isn't as if there are enough projects around to keep the other 2/3 busy
I've never worked at any company where there was any limit to the work to be done. Sales people don't give a shit what your product can do, only what they can sell, and they never sleep.
The issue is how much of that work is "valuable" in the sense = makes money.
I have both been in projects and seen projects which were canceled once it turned out they didn't make money (bad sales? bad product? bad market fit? a bit of everything?). This you can only afford when you have money to spare (= with debts? high profits...?).
With the interest rates so high, how can a company justify hiring dozens/hundreds of people more? It's a risk, and what I am seeing now is that companies are shrinking left and right to focus on the business that makes money and reduce headcount on what they believe doesn't make money at all, or it's a cost too high for their "long term strategy" or whatever. Right now the only metrics that they are caring about is EBIDTA. They don't even care anymore about ARR, they are becoming irrelevant as long as they stay within a range (we want 20% increase, but we're ok with 5%).
The AI will replace everything and everyone is working out pretty well for Anthropic/OpenAI, though.
Example: natural monopoly in some geographically-locked domain. Just to grab an example. You have 150 people in the field, can't let them go because the company still needs hands and eyes on the ground. You have 15 people in some other, paper-pushing department. Thanks to AI advances, you only need 10 of those now.
That's actually it. The part that can be sped up with AI don't change how slow everything else still takes. If you need 2 weeks to see the results of a change before AI, you still need that after AI.
Basically, your business is not keeping pace with development.
Even in cost centers like IT or ops, there’s usually an endless backlog of work, technical debt, support requests, and improvements that never get prioritized because resources are limited.
Eh, are they doing that though?
Anecdotally, firing people “on the bench” isn't whats happening.
Read the tweets. Listen to people still working at these big corps. They are gutting teams and pushing more work onto people because they believe they can be more productive, not because they are.
Lets that sink in.
People are being made redundant on the basis that leadership believes that in the future they will have an over capacity and theyre cutting early to avoid the bench scenario.
It is speculative.
What this article is arguing, is that, that is stupid.
If, in the future, you need to spin up new initiatives, youve screwed yourself by disposing of your excess capacity in the magical hope that your current capacity will magically increase itself by … spending more money on tokens.
Its just nonsense.
AI is just an excuse for poor historical decisions and unfortunate global economic conditions.
The “cuts due to AI” will be real. There will be people sitting idle as the models improve and people learn to use them better.
… but right now?
they're not. Im not. My friends arent. My former work mates arent. The people left at these companies arent. The people being cut werent (except perhaps, at meta)
Its stock price hype theatre.
In some of those well known offshoring companies, being on bench automatically means a downcut on the salary as cost measure.
That has nothing to do with AI.
It is happening due to global economic conditions.
Im not saying the bench doesn't exist, Im saying its not full of people because you have two consultants doing all 59 jobs with AI.
There are definitely places making cuts of staff who are not on the bench.
Layoffs are a strong signal that a business is not investing in growth and is just trying to wring more profit from the same thing. If investors were rational, they'd walk away.
Maybe replacing the expensive C-suite with an LLM would help make better, growth-oriented decisions.
Not always. A buggy whip maker in 1920 should be laying off people. No amount of investment in buggy whips will bring that market back.
A layoff is saying that the investment will not pay off. So long as the company is cutting the right things they are good. Many layoffs are not done with a proper cut of the work do be done and so are bad, but that doesn't mean they are always bad.
If you're growing obviously it's stupid to fire but if you have plateau'd the easiest gain is to trim the fat, so to speak. Also once a company is acquired by a private fund, everyone becomes a title and a number in a spreadsheet, that's all.
A lot of companies simply have no direction and aren't looking to build new products. They had a success, rotated in some myopic execs, flipped into rent-seeking mode and are trying to wring more cash out of the same progressive enshittified product.
It works for some it fails for others.
Some businesses can grow, some cannot grow, some grow at different rates. The risk adjusted (subjective) prices determine whether or not an investor should walk away.
there's also what the market is ready for. we've said that some products failed because they were ahead of their time. it's even more true now where the power of ai, ai productivity, etc could take the product far beyond the markets expectation. what does that lead to? the deliberate slow rate of growth means power/potentials have to be controlled somewhat. so even without hiring, if ai is adopted as a first-class tool within the organization, there will be surplus resources that need to be shed somehow.
Businesses are not magically efficient
Many businesses are not bottlenecked by processes that are computer based.
Obviously, there are limits: I’m not sure what my local grocery store or bus line would do with 100 new workers, but I have no doubt they could put a few people to work right away.
ETA: this is sometimes (though not always) very different for a mature company than an early stage startup.
I suspect another big part of it is that marketing and sales are relatively easy to measure and to scale.
You can hire one, two, or three new salespeople and expect that revenue will change more or less proportionately. Fixing (or ignoring) a handful issues doesn’t scale so smoothly—-there are jumps where the product suddenly seems much better/worse.
- AI pricing is variable, probably the cheapest it will ever be right now
- AI produces a lot more shit for humans to review, and you will always need humans. If you don’t focus on keeping things simple you will probably play yourself unless you’re good at separating out blast radiuses.
- I see a lot of super low quality work that doesn’t solve the problem but it’s like look that guy solved the problem in one day! Promote him! Everyone is happy except for the end users who for whatever reason are being totally ignored (whose problem it fails to appropriately solve) and I saw this in accounting software so…hello eventual lawsuits?
Humans are accountable and act accordingly, models are not.
2025: agents are the future!
2026: we don't need any new employees
_stuff gets real_
2027: wow, employees are actually pretty good value.*
For example, looking through meta data in a SQL environment that you didn't know existed to troubleshoot an issue. And a million other things. The odds of any employee not knowing everything are very good, even when humanity as a whole had already discovered that thing.
There is absolutely room for head count reduction while companies restructure around this.
You can't put "undocumented knowledge" into a spreadsheet.
Idiots who truly believe that AI will actually replace a significant amount of the workforce (Long term, it will not but some jobs displaced) and those who have internalised that ZIRP is over, they need to be more lean as VCs have closed their wallets and saying "We've revolutionised our workflow with AI" than "We haven't turned huge investment debt into profit in 5 years and we need to reduce headcount for even the slightest chance of that happening, or at least raise again by saying 'AI' over and over" has far better optics.
As I understand it there are some underlying problems in the industry. Companies aren’t exiting which means VC’s aren’t getting returns and investment is slowing. In order for NVIDIA to maintain its current valuation, it has to keep growing at the rate it’s been growing which is the time during which companies have been piling on debt to perform extreme investments in AI. On top of this the growth rate is also based on extreme circular dealing.
So the whole thing isn’t sustainable, but the crash doesn’t happen until some big player blinks and their forecast / valuation goes down. And the only path to the kind of growth / gains people saw during the peak of the internet era is through AI.
Probably none of these big companies will fail, but it will be deeply uncomfortable for all of them when the music stops. And I wonder if it bankrupts a swath of the current generation of VCs.
Today, even someone with minimal context can ship end-to-end prototypes. That means existing employees, the people with actual domain knowledge should be able to innovate faster than ever. Anthropic has shipped one of the best coding agents on the market and still has hundreds of engineering roles open.
High-agency people with company context and ideas within each company should be getting amplified right now, not laid off. Instead they're stuck figuring out how to "tokenmaxx" because leadership mandated it and they are forced to ship software no one will use in order to keep their jobs.
Flag and move on. Too bad the HN audience eats this shit up by the spoonful.
But the point about there being nothing new in the article still stands.
Along another vein, I guess I wonder with my limited knowledge of economics if the demand for programmers is elastic or inelastic.
You take the same pot of money and allocate it differently:
2010s: Hire 10 programmers
2020s: Hire 9 programmers and pay for the best AI money can buy
The 9 programmers with AI will be more productive than the 10 without.
Once software becomes cheap, the bottleneck to growth shift to product design, infrastructure/manufacturing, sales and support.
The largest problem with software employment is defining software developer performance. There is no industry baseline for defining or measuring this. Its so easy for a person to be that 10x (or much greater) developer in a compatible team or be a complete failure on the wrong team.
I've worked with people who demonstrated below-average judgement, and I've seen cases of good judgement from AI. I think if a company can identify the poor performers and part wit them, there is a decent chance that the remaining people with AI in hand can more than make up the difference.
How many engineers do you think that can pay for? At 100k/year that's a pretty huge team.
Also you need both now. It’s not enough to just have humans, and that OpEx needs to come from somewhere.
I’m not happy about it - just the way it is.
— Every every single current tech c-suite
I'm personally at a fintech startup and have a 100$ subscription. Our org is much leaner and its much faster to ship stuff. What used to be entire departments or teams can now be done by two or three people. Three people to ensure we share context and have a decent tram factor.
Of course a leaner team can ship faster. But your stakes are much lower. A production bug has less visibility and impact. Limited revenue means less stakeholders, and less opinions about how and what to do in a startup. Less customers means less customer support and feedback. The differences go on and on. I'm not sure you can attribute all of that to AI assistance.
Good luck with your fintech startup. I'm in that space too and its a bear.
This is a capitalism functioning correctly as labor as in then moved to places it is needed more. Its sort of shocking to see devs complain about getting laid off. Thats the point of a high variance career. Great and terrible outcomes go hand in hand, if you want one you must expect the other.
But, they're also jagged in terms of functionality. When you work with a human, you can learn what their core competencies are, and then if you give them a task that falls within that domain, you can be reasonably sure they'll finish it correctly. That's not the case with LLMs. It might do one task brilliantly, and a next similar task, it just shits the bed on.
And since it has no understanding of the task in a human sense, it can't self correct, learn or improve. All its doing is stringing tokens together based on probability. So, you need a human in the loop to review what it's doing, to correct it when it makes mistakes, and to define the actual goals. My experience is that doing all that properly ends up taking up a lot of time, so your actual productivity gain per person aren't all that significant.
Companies that try to replace humans with LLMs will soon find that they end up with a whole bunch of code that doesn't actually work, and they have no hope of fixing. The double edge of LLMs is that they're really good at generating a lot of wrong code really fast.
Investors like growth, not shrinkage. Claiming AI is replacing those jobs helps avoid the appearence of shrinkage, while also feeding the AI hype machine that many of these companies have invested heavily into.
And that is a problem. If you employ people whomlove to comlkain are basically minus 0.1 of regular employe (tolerable annoyance), they get power multiplier and instead of small rants at water cooler, will be able to file federal law suits under employers ass.
And they will also get way more ways to harrass productive employes.
This kind of sentences are typically AI-generated. What’s the point of an article about AI generated by AI?
“Remove this old feature.” “Are you sure you didn’t break anything?”
That was it. Then I manually tested it to make sure nothing was broken. Then I did a brief review before posting it for code review and then pushed it. What would have taken me probably about 1 day to go through and figure out code changes and then actually change the code took me about 30 seconds.
To think that we need to maintain the post-Covid hiring bloat is nonsense. I’m not so arrogant to think that someone with an llm can’t replace me, if I survive a few more years in this industry I’ll be amazed and grateful.
Tech companies are bloated AF. Most of these people are not as crucial as it would seem.
Not that tech companies can't be bloated. But I think the bloat is far less obvious when viewed from more than one perspective. Ie. there's an enormous amount of wrongly placed "what do they even do here?" because we only see the individual from our seat at the company.