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I'm convinced that these "AI Layoffs" are these companies trying to save face from the absurd overhiring that they did in 2022 and 2023 because apparently they

• alephnerd 8mo ago
  > I'm convinced that these "AI Layoffs" are these companies trying to save face from the absurd overhiring that they did in 2022 and 2023 because apparently they thought that these no-interest loans/free money would just last forever. Partially. The first nail in the coffin was the change in assumptions around output. Before 2023, there was an assumption that more bodies means more output. After the massive X/Twitter layoffs (60-70% headcount culled) with X/Twitter still standing, this assumption was clearly proven false. The second nail was the change in operational metrics. Before 2023, ARR growth was a good enough metric to target. After 2023, FCF positivity became the name of the game. Especially because us investors are demanding this because most funds are reaching the 10 year mark where we need to make our LPs whole, so a path to exit (be it IPO, M&A, or a continuation fund) needs to be communicated. And finally, COVID proved to a large number of companies and industries that 100% WFH and Async for white collar roles does work. But wait, if I can hire Joe in Cary to work async, why can't I hire Jan in Karlin, Prague or Jagmeet in Koramangla, Bangalore? This means I can also enhance FCF positivity while not impacting delivery. Add to that some very, very, very bad hires (most bootcamp grads just can't cut it) at absurdly high salaries and that's why you're seeing the culling that is occurring today. That said, AI tools are powerful, and if you are working on rightsizing an organization, using Claude or Enterprise GPT in workflows helps one person do multiple jobs at once. We now expect PMs to also work as junior program managers, designers, product marketers, customer success managers, and sales engineers and we now expect SWEs to also work as junior program managers, designers, docs writers, and architects. Now I can lay off 10-20% of my GTM, Designers, SWEs, Program Managers, and Docs Writers and still get good enough output. --- IMO, if you want to survive in the tech industry in this world, doing the following will probably help maintain your longevity: 1. Move to a Tier 1 tech hub like the Bay and NYC. If you get laid off, you will probably find another job in a couple of weeks due to the density of employers. 2. Start coming into the office 2-3 days a week. It's harder to layoff someone you have had beers or coffee with. Worst case, they can refer you to their friends companies if you get laid off 3. Upskill technically. Learn the fundamentals of AI/ML and MLOPs. Agents are basically a semi-nondeterministic SaaS. Understanding how AI/ML works and understanding their benefits and pitfalls make you a much more valuable hire. 4. Upskill professionally. We're not hiring code monkeys for $200K-400K TC. We want Engineers who can communicate business problems into technical requirements. This means also understanding the industry your company is in, how to manage up to leadership, and what are the revenue drivers and cost centers of your employer. Learn how to make a business case for technical issues. If you cannot communicate why refactoring your codebase from Python to Golang would positively impact topline metrics, no one will prioritize it. 5. Live lean, save for a rainy day, and keep your family and friends close. If you're not in a financial position to say "f##k you" you will get f##ked, and strong relationships help you build the support system you need for independence. The reality is the current set of layoffs and work stresses were the norm in the tech industry until 2015-22. We live in a competitive world and complaining on HN does nothing to help your material condition.
  • mschuster91 8mo ago
    > And finally, COVID proved to a large number of companies and industries that 100% WFH and Async for white collar roles does work. But wait, if I can hire Joe in Cary to work async, why can't I hire Jan in Karlin, Prague or Jagmeet in Koramangla, Bangalore? This means I can also enhance FCF positivity while not impacting delivery. Cultural differences. Things like "saving face" / not being able to admit a lack of knowledge in Asian cultures, Americans that need to be coddled (the higher up, the more dumbed down execs want information because they insist on micromanaging - they try to have their cake and eat it at the same time), Germans being blunt and direct to the point it offends Americans, Americans unable to comprehend Europe has labor regulations including on overtime and on letting go of staff... if you just say, you hire a bunch of bodies somewhere else and expect that to work out, you end up screwed - and many did end up screwed. In both ways, by the way.
    • alephnerd 8mo ago
      It doesn't matter anymore. Output is good enough - much of Google, Amazon, Microsoft, Meta, Nvidia, Broadcom, and other tech companies backbone infra or core IP is already implemented and owned by product and engineering teams in Poland and India or by foreign nationals in the US on work visas (eg. PyTorch). And if middle managers cannot manage to maintain output when faced with those with cultural differences, we'll fire them and hire people who can. This is why you see the trope of "Indian C-Suite means layoffs and offshoring" - it's not the C-Suite that makes this decision, it's boards that decided to do so and thus hired an Indian origin C-Suite to operationalize that strategy. It's the same reason why Taiwanese Americans were over-represented in Hardware Engineering C-Suite roles 10-20 years ago when "China Shock" began in hardware industries. It became easier to hire Jans and Jagmeets after a large number of SWEs and middle-managers in tech who were on visas were given the option to either be laid off or relocate to the old country and open a GCC during the initial COVID recession. And I may as well hire Pawel and Param as Product or Engineering Directors in MTV or SF and have them fly out to the Prague, Warsaw, Bangalore, or Hyderabad office every couple weeks. > Americans unable to comprehend Europe has labor regulations including on overtime and on letting go of staff... That's Western Europe (think Germany, France). Central and Eastern Europe (think Czechia, Poland, Romania) roll out the red carpet for us, and we pay 75th-90th percentile salaries in those markets (which usually ends up being in the $80K-130K TC range) meaning we get the cream of the cream. Heck, Czechia and Poland have dedicated bureaucrats who work with us to solve regulatory issues and give several thousand dollar per year per head subsidizes when investing in building a GCC. It's the same with India as well.
• notatoad 8mo ago
  it's all just saying stuff the shareholders want to hear. when the shareholders want to hear "we're staffing up aggressively" the companies hire. when the shareholders want to hear "we're moving workloads to AI" the companies fire. it's not using AI as a scapegoat. they're doing this because they're quite literally being rewarded for it. they could care less what the employees who are getting fired think, as long as the investors are happy.
• malfist 8mo ago
  That might have been true three years ago. But not now
• georgeecollins 8mo ago
  Regardless of the reasoning I think it is worth keeping in mind that the times when companies are letting talented experienced people go is also a great time to start the next new big thing. Talent that might have been unobtanium during a hiring frenzy could now be the building blocks of a new venture. A lot of these companies were started or really built themselves up during a tech slow down.
  • iriisatremotely 8mo ago
    [dead]
• SanjayMehta 8mo ago
  Re: over hiring I haven't worked for a large company for a long time but the last place I was my VP pushed us to hire 1000 people in one year. Turns out he was an acting VP, and needed to have that number for his formal promotion. Our division got penalised at the end of the year for falling short. By 30+ people. I left before it collapsed and was sold for parts.
  • dayone1 8mo ago
    wow which company was this?
    • no-dr-onboard 8mo ago
      Not op, but GitLab fits the form.
      • raverbashing 8mo ago
        but was GitLab sold? I don't think so
    • SanjayMehta 8mo ago
      I'll give you a hint: the company was featured prominently in the preface to The Dilbert Principle.
      • vldx 8mo ago
        Pacific Bell
• dakolli 8mo ago
  Stoping trying to cope that AI/LLM augmented automation isn't to blame here. equities and profits are at all time highs, rates are still really low!! This has nothing to do with the cost of money. It doesn't matter if AI is effective at reducing head count, it only matters that decision makers believe it will! If they go on twitter and see "SWE is dead" "4th industrial revolution is here" ect ect, they will eventually fall for the psyop and give half of their payroll to an AI company (or someone claiming they can do this).. It will all backfire, probably, but in the meantime 400k SWEs have been laid off in the last 16 months while profits and equities are at all time highs. You can try to say its not AI, but I really think that's cope. Go have lunch with a C-suite / decision maker in tech, they won't shut up about how all the jobs are going to be bots in the near future (and how rich it will make them). They are sincerly stupid but until then lives/families are going to get crushed and Dalio and Altman or similar people are going to continue to convince these people to give your salary to them.. Props to block for letting people keep their devices, and helping people out, its more than most companies but this absolutely has to do with AI BS. They've been itching to cut human labor out of the equation since slavery was crushed. They yearn for labor that doesn't demand a paycheck (slaves).
  • johnnyanmac 8mo ago
    >Stoping trying to cope that AI/LLM augmented automation isn't to blame here. It's not cope. The math just isn't mathing. the efficiencies advertiesed don't match the layoff proportions. The earning call employment counts don't match with the idea that they are "downsizing" as a company (meanwhile, what semblence of truth we have left in the job numbers DO suggest that we lost a lot of white collar jobs in 2024/5). The output error of deployed products don't match the sentiment that AI is leading to equal/higher quality software. The volume of litigation doesn't match this sentiment that "AI is here to stay". This is less about whatever I personally think of AI (and especially its future) and more acknowledging that this is simply an irrational market. Yes, the market can indeed remain irrational longer than I can stay solvent. But that irrationality also has a time limit. I'm sure people in 1928 can point to how high its stocks were too.
    • mjevans 8mo ago
• johnnyanmac 8mo ago
  >I'm convinced that these "AI Layoffs" are these companies trying to save face from the absurd overhiring that they did in 2022 and 2023 This keeps coming up, but the numbers at these companies don't add up. Any given FAANG you can think of (outside of maybe Apple) has had at least 5 rounds of layoffs over the years. But can you point to any of them having a lower headcount? I doubt all those engineers are being redirected towards AI development. And despite that similar hearcount, it seems all have decrease initiatives over the years too. Meta stepped back from the verse it re-branded under, for instance. I'm fairly convinced that what's happening is outsourcing initiatives disguides as layoffs for AI efficiencies.
• salviati 8mo ago
  It might actually be that they mean what they say. If you look at the numbers, this doesn’t resemble a company cutting because it’s in trouble. Block is profitable, gross profit has been growing double-digits year over year, and they’re guiding roughly ~18% gross profit growth into 2026 with strong expected expansion in adjusted operating income and EPS. That’s not a balance-sheet emergency. You can argue they overhired in 2020–2022 and are normalizing. That’s plausible. But the financials don’t suggest a company scrambling to survive. Cutting that aggressively while guiding strong forward growth is unusual if the only goal were short-term margin repair. So while “it’s AI” can sound like PR, the numbers at least make it credible that this is a structural efficiency move rather than a distress signal.
  • fortzi 8mo ago
    I don’t know… If the company is so healthy and has some nice financial buffer, I would expect the increased productivity due to AI to be used for more revenue generation. So either they don’t know how to translate all the quality hires they got into (enough) revenue, they can’t afford it, or maybe they they hired too fast to maintain quality :shrug: That’s my read at least
    • fhd2 8mo ago
      It likely has to do with changed investor preferences. In the boom years, it was OK to grow at all costs, make money whenever. Nowadays investors are looking to cash out earlier, from what I observe. Gotta find ways to make the stock move up in that environment, cost-cutting-because-AI seems to work right now. I'm not 100% convinced it means they gave up and are trying to cash out. It could also be that they just struggled to integrate all the people in a meaningful way, even if they're all really good. Having grown a company from a hand full of people to 250, I more than once fantasized about going back down to ~100. Scaling companies well is hard. 10k, I can't even imagine.
  • vimda 8mo ago
    Profitable, and yet missed their revenue targets in Q3, causing their stock to tumble. That's an emergency. https://www.bloomberg.com/news/articles/2025-11-06/dorsey-s-block-falls-on-revenue-miss-despite-cash-app-growth?leadSource=reddit_wall https://www.bloomberg.com/news/articles/2025-11-06/dorsey-s-...
• pjmlp 8mo ago
  Having been through a couple of layoffs and merges, as I approach mid-century, the MBA powered managers are always to blame, because the stupid way to manage every year has to be x% exponential increase over the previous year, always forgetting that it is physically impossible when everyone goes for the same goal. And then when targets aren't met, it is the employees that get shown the door while management gets their bonus. The companies that are happy getting what they need to keep the lights on, seldom go through such layoff rounds. Ah but the shareholders can sue the CEO, well this seems to be an US approach to how companies are run.
  • TeMPOraL 8mo ago
    > the stupid way to manage every year has to be x% exponential increase over the previous year, always forgetting that it is physically impossible when everyone goes for the same goal. That's why we have this corporate ritual, which we carry out each year, or even each quarter - a solemn ceremony, where we divide everyone into two groups: the cost centers and the profit centers. Everyone works in harmony for the same organizational goals, but the people of cost centers also bear an additional, sacred duty, the highest of callings: to give up their employment and prospects for the future, to have their due credit be taken by the people of profit centers and poured onto the altar of the all-powerful Board. It's through this sacrifice of the many, that the symmetry is broken, allowing the year-by-year metrics to continue growing, against all wisdom and the laws of thermodynamics.
    • unsupp0rted 8mo ago
      As if some people are born as cost centers, like it’s the genetic programming for pupillary distance. If you want to be a profit center, be one. When the body is in danger of dying should it stop healing the fingernails or the brain?
      • TeMPOraL 8mo ago
        > As if some people are born as cost centers, like it’s the genetic programming for pupillary distance. I literally said the opposite of it. The classification is descriptive, and frequently reevaluated. It'd not a property of a person, but a function of where they currently are in the org chart. > If you want to be a profit center, be one. Sure. > When the body is in danger of dying should it stop healing the fingernails or the brain? Nothing is dying, though. The body that is the org needs both kinds of centers to function. Like any other system that resists entropy, it has parts that are sacrificed so other parts are preserved.
• DebtDeflation 8mo ago
  > the absurd overhiring that they did in 2022 and 2023 The overhiring took place from mid 2020 through mid 2022. The reversal into layoffs started in late 2022 and was in full swing in 2023. While the overhiring problem was real, the correction was largely complete over a year ago. The layoffs we're seeing today have nothing to do with overhiring and everything to do with managing earnings to sustain equity valuations.
  • darkstar_16 8mo ago
    I think it's a bit of both and perhaps 10% AI. Companies like Block are bloated for what they offer.
  • re-thc 8mo ago
    > the correction was largely complete over a year ago We had tariffs and other disruptions since. So more correction is required.
  • jalapenos 8mo ago
    > managing earnings to sustain equity valuations That's an interesting take, so eventually they'll just run out of these tricks and at that point the valuations will burst?
    • oblio 8mo ago
      Bingo. Yes. The trick, as usual, is timing the pop.
    • ProjectArcturis 8mo ago
      No, there'll always be a new trick.
      • _DeadFred_ 8mo ago
        That's what the MBA are paid for. New magic tricks.
  • freehorse 8mo ago
• taneq 8mo ago
  Never let a crisis go to waste, right?
• hintymad 8mo ago
  > save face from the absurd overhiring that they did in 2022 and 2023 I wonder how we all of sudden got so many candidates back from 2020 to 2022
• beAbU 8mo ago
  My take is that if AI really improved productivity, then that makes labour effectively cheaper. Usually, when labour is cheap, then you buy lots and lots of it so that you can get a lot of things done. I think it's called the Law of Demand? Companies over-hired during COVID because the money was free thus making the labour cheap. Why are they not over-hiring now, during a time when workforce productivity is supposed to be at an all-time high? Instead we are seeing layoffs, blaming AI, because the free-money chickens have come home to roost. These CEOs want to save face and not admit they were short-sighted during COVID.
  • inanutshellus 8mo ago
    > that makes labour effectively cheaper. But it isn't cheaper yet, right? Your current salary was defined pre-AI. Now, though, maybe you're only worth a third of what you were but you can't live on a third, and your employer can't just start giving you less money, so... they lay you off then in a year or three when the tailspin starts to hit bottom, they hire Younger You for ~$X/3.
    • alecbz 8mo ago
      If AI makes people more productive then labor is cheaper than it was pre-AI, even at pre-AI salaries, because you're getting more done at the same cost.
      • fhd2 8mo ago
        Exactly, I find the math fairly simple: 1. Employee costs x; 2. Employee produces output worth y; 3. Your profit from this particular employee is z = y - x. So far so good. Let's assume z > 0, though of course it's not an easy statement to make with many roles, that are more like investments. But let's assume they're good investments and you're confident z is positive. Now, if the same employee produces 2y, but doesn't receive a raise, z just improved significantly, it more than doubled. So effectively, labour just became cheaper in relation to the value of its output. If it was that simple, layoffs would hurt profitability significantly. Now what if you can't translate improved productivity to additional value? Simple example would be an agency with a fixed contract volume. If increases in y can't be realised, e.g. by finding more business, then the only way for the company to realise the gains is to reduce x, i.e. layoffs. z goes up right away, no business development required. I think it's a defensive stance companies are taking. The economy is not great, they're hitting the breaks on investments, increasing their runway, shrinking to force the organisation to become more efficient. Once they're ready to invest again, they can always hire again. But I read layoffs-because-AI as "we don't know what to invest in right now, so we'll buy some time to figure that out".