Let’s Talk About The Real Reason For All These Tech Layoffs

🌈 Abstract

The article discusses the recent wave of tech layoffs, analyzing the reasons behind them and debunking the common narrative that these layoffs are part of a plan to fuel growth. The author argues that the layoffs are not driven by AI replacing jobs, but rather by a combination of factors, including the frothy economic conditions of the past few years, the race to adopt AI, and the disconnect between the business side and the tech side.

🙋 Q&A

[01] The Gall of Corporate Layoff Statements

1. What is the author's view on the reasoning behind corporate layoff statements?

• The author finds the reasoning behind corporate layoff statements that claim the job cuts are part of a plan to fuel growth to be offensive and bullshit. The author firmly believes that you cannot cut your way to growth.

2. Why does the author find this reasoning offensive?

• The author finds the reasoning offensive on a deep spiritual level, as they believe that the tenet of business that you cannot cut your way to growth is unflinching.

[02] The Reasons for Tech Layoffs

1. What are the main reasons for the tech layoffs, according to the author?

• The author identifies a few reasons for the tech layoffs, most of which are unavoidable:
  • The frothy economic conditions of the past few years, with free cash flow and a race to adopt AI
  • The disconnect between the business side and the tech side, with the business side thinking they understand tech better than they do
  • The overconfidence and understaffing/underskilling of the people in charge of building the tech

2. How does the author view the narrative of AI replacing jobs?

• The author dismisses the narrative of AI replacing jobs, stating that the current evolution of generative AI (GenAI) is not going to be the AI that universally replaces knowledge-based labor. The author argues that GenAI can be more accurately described as "powerful computers doing if/then statements really fast" rather than "sentient" AI.

3. How does the author explain the threat of GenAI to SaaS and business intelligence systems?

• The author explains that GenAI is indeed a threat to SaaS, especially the business intelligence systems that create and aggregate the data that power many B2B SaaS. These companies are "freaking out" and see AI as a panacea that can solve their problems for less cost, rather than relying on high-priced software engineers.

[03] The Disconnect Between Business and Tech

1. How does the author describe the disconnect between the business side and the tech side?

• The author argues that the business side now thinks they understand tech better than they do, hiring a lot of entry-level tech talent with syntax and terminology knowledge, but lacking the decades of experience and resentment that the tech side has built up. This has led to the business side's "unearned entitlement" and the tech side's "earned resentment".

2. How does the author view the role of the people in charge of telling the story of tech?

• The author criticizes the people in charge of telling the story of tech, stating that they are selling the "most dystopian story imaginable" about AI replacing jobs.

3. How does the author describe the actions of the people in charge of cutting the checks?

• The author argues that the people in charge of cutting the checks are chasing a "swinging pendulum" and are scared of getting burned again, leading them to start erasing the board and laying off tech workers.