5 ms·

Cutting layers of bureaucracy not replacing with AI

by smithcoin 7mo ago

doomslayer999 7mo ago
[flagged]
- mc32 7mo ago
  I’m down for that. There are so many “facilitators” in middle management, some really good and quite a few bad ones and many making no difference. I don’t know how people thought they were good positions to hire for. Remember before Covid many a company deadweight showing us the vast amounts of unwork they did at their companies on their YouTube videos? Proudly showing how idle they were? Not all the firings are deadweight but a lot are. There is also a general tightening of budgets and people who are part of dead-end programs that are being let go. When the economy was hotter companies would keep these people to add at the margins; I think now that money is still tight they’re not keeping that luxury.
  - jjmarr 7mo ago
    In a zero interest rate environment, literally any return on investment justifies spending. If interest rates are 3.8%, the company needs at least a 3.8% return every year on your yearly compensation to justify your job.
    - Retric 7mo ago
      Not if they are compensated during the year. Grocery stores have slim margins, but if you make 10k after selling 1M worth of stock buy turn over that stock 12 times a year that’s ~12% annual ROI not 1%.
      - deleted 7mo ago
        [deleted]
      - jjmarr 7mo ago
        If the company is spending $100k to employ you, you need to deliver $103.8k/year of value.
        Retric 7mo ago
        Again you assume a year delay on a workers full salary before the company gets compensated. Cash flow rarely works like that. Uber driver does what 2 weeks of work before getting paid, they also front the cost of their car and gas etc. Meanwhile users are paying as soon as the ride occurs, so uber doesn’t need an account with a full years salary for every driver somewhere at the start of the year. Get paid before the worker and the worker is in effect giving you a zero interest loan. Now for a consultant the company may get paid after the worker but the company is rarely waiting a more than a few weeks.
        jjmarr 7mo ago
        Do you see the broader point I'm making, which is that non-zero interest rates means delivering value isn't enough anymore?
        Retric 7mo ago
        +/- 0.1% over a year isn’t meaningful here. I understand that you’re unwilling to reconsider your beliefs when they are based on faulty math and thus don’t reflect the underlying reality here. A plumber, doctor, teacher, cook, etc does work before getting paid and the company rarely needs to wait 365 days for someone to pay them for that work. This means your idea is inherently flawed, there’s no broader point when you’re making a mistake. Further future revenue is generally inflation adjusted. If you borrow 1B to build a power plant you sell electricity at future prices not what electricity was worth when you started building. When the reverse happens say at collages when they get paid months before professors get paid, the school isn’t increasing salaries every month to keep up with inflation.
    - alexanderchr 7mo ago
      You'd calculate return on investment based on invested capital, not on expenses, so this does not follow.
    - xorcist 7mo ago
      That's .. not at all how interest rates work.
- logicchains 7mo ago
  It's not the boomers' fault, they were misled into believing the social security system they were paying into was a genuine savings system, not just a perpetual wealth transfer system from the young to the old.
  - avidiax 7mo ago
    How were they mislead? From day one, Social Security was a "new money pays old money" scheme, the one thing that makes it Ponzi-like. To be fair, the boomers got screwed in the 1980's SS reform to pay for their parents (but had it sweet before), so maybe this is just paying it forward.
    - mothballed 7mo ago
      It was specifically sold as 'insurance' to the public around the time it was being passed. Well except for a short period where that was going to be deliberated on by the courts, where they stopped calling it insurance since SCOTUS indicated this insurance wouldn't be constitutional, so instead they put it under general welfare clause but then changed up their rhetoric immediately after it was found constitutional back to it being insurance again. Also the people that wrote the bill later admitted they intentionally wrote it in a confusing as way to evade public and judicial scrutiny.
  - doomslayer999 7mo ago
    [flagged]
    - mothballed 7mo ago
      FDR essentially pioneered the modern use of the omnibus bill by threatening to veto any assistance to the poor/elderly that didn't include social security. Basically his goal was to make the poor starve if social security didn't pass, and blackmail politicians into being forced to vote for it. Of course this was all predicated on the other prong, which was the 'switch in time that saved 9' where he also threatened to pack the courts to ensure it was found 'constitutional'. FDR was quite ruthless in his destruction of constitutional and democratic controls, and now so much of our government depends on it that it's effectively politically impossible to unwind.
rishabhaiover 7mo ago
Google's projected AI capex spend is $170-180 billion for this year. It's unreasonable to think AI would not be a reason for companies to consider layoffs.
- IgorPartola 7mo ago
  There are two ways to interpret your comment: 1. Google is getting so much productivity out of their AI that they need fewer people. 2. Google is spending so much on AI they can’t afford to keep the people they need.
  - PessimalDecimal 7mo ago
    I subscribe to the second point of view. Several companies fall in that bucket. Oracle comes to mind.
  - rishabhaiover 7mo ago
    Google (and almost all other BigTech) is spending on scaling compute (data centers/securing power generation/chip contracts). My comment was not related to AI producivity and its impact on reduction of workforce. I believe a company spending nearly all its free cash flow on scaling compute (or borrowing money to do so) would have a different opinion on the economics of human capital.
  - bayarearefugee 7mo ago
    Or 3. Google is spending so much on AI that they can't afford to keep paying people, but they are ok with this because they are convinced the AI investment will replace the people at an eventual cost savings.
    - dd8601fn 7mo ago
      That seems to have been Dorsey's approach. The business has been stagnant, so cut the roster and bet big on some future returns from AI.
- fcarraldo 7mo ago
coffeefirst 7mo ago
Some of this smells purely nihilistic. The market rewarded layoffs with higher stock prices, incentivizing more layoffs.
- dd8601fn 7mo ago
  It sure didn't reward Atlassian. If anything it accelerated the long, downward slide.
  - stefan_ 7mo ago
    Atlassian hasn't made money in 10 years. Of course they can't ride on the latest stock slop meme, that company is such an unmitigated disaster it beats even their terrible software. And now they keep spamming me with that Rovo garbage, god I hope they go down among all of this.
- HDThoreaun 7mo ago
  I dont think zuck cares especially much about the stock price. He's certainly not beholden to any shareholders. He's doing this because he genuinely thinks it will help the company to trim the fat.

Cutting layers of bureaucracy not replacing with AI

doomslayer999 7mo ago

[flagged]

mc32 7mo ago
I’m down for that. There are so many “facilitators” in middle management, some really good and quite a few bad ones and many making no difference. I don’t know how people thought they were good positions to hire for. Remember before Covid many a company deadweight showing us the vast amounts of unwork they did at their companies on their YouTube videos? Proudly showing how idle they were? Not all the firings are deadweight but a lot are. There is also a general tightening of budgets and people who are part of dead-end programs that are being let go. When the economy was hotter companies would keep these people to add at the margins; I think now that money is still tight they’re not keeping that luxury.
- jjmarr 7mo ago
  In a zero interest rate environment, literally any return on investment justifies spending. If interest rates are 3.8%, the company needs at least a 3.8% return every year on your yearly compensation to justify your job.
  - Retric 7mo ago
    Not if they are compensated during the year. Grocery stores have slim margins, but if you make 10k after selling 1M worth of stock buy turn over that stock 12 times a year that’s ~12% annual ROI not 1%.
    - deleted 7mo ago
      [deleted]
    - jjmarr 7mo ago
      If the company is spending $100k to employ you, you need to deliver $103.8k/year of value.
      - Retric 7mo ago
        Again you assume a year delay on a workers full salary before the company gets compensated. Cash flow rarely works like that. Uber driver does what 2 weeks of work before getting paid, they also front the cost of their car and gas etc. Meanwhile users are paying as soon as the ride occurs, so uber doesn’t need an account with a full years salary for every driver somewhere at the start of the year. Get paid before the worker and the worker is in effect giving you a zero interest loan. Now for a consultant the company may get paid after the worker but the company is rarely waiting a more than a few weeks.
        jjmarr 7mo ago
        Do you see the broader point I'm making, which is that non-zero interest rates means delivering value isn't enough anymore?
        Retric 7mo ago
        +/- 0.1% over a year isn’t meaningful here. I understand that you’re unwilling to reconsider your beliefs when they are based on faulty math and thus don’t reflect the underlying reality here. A plumber, doctor, teacher, cook, etc does work before getting paid and the company rarely needs to wait 365 days for someone to pay them for that work. This means your idea is inherently flawed, there’s no broader point when you’re making a mistake. Further future revenue is generally inflation adjusted. If you borrow 1B to build a power plant you sell electricity at future prices not what electricity was worth when you started building. When the reverse happens say at collages when they get paid months before professors get paid, the school isn’t increasing salaries every month to keep up with inflation.
  - alexanderchr 7mo ago
    You'd calculate return on investment based on invested capital, not on expenses, so this does not follow.
  - xorcist 7mo ago
    That's .. not at all how interest rates work.
logicchains 7mo ago
It's not the boomers' fault, they were misled into believing the social security system they were paying into was a genuine savings system, not just a perpetual wealth transfer system from the young to the old.
- avidiax 7mo ago
  How were they mislead? From day one, Social Security was a "new money pays old money" scheme, the one thing that makes it Ponzi-like. To be fair, the boomers got screwed in the 1980's SS reform to pay for their parents (but had it sweet before), so maybe this is just paying it forward.
  - mothballed 7mo ago
    It was specifically sold as 'insurance' to the public around the time it was being passed. Well except for a short period where that was going to be deliberated on by the courts, where they stopped calling it insurance since SCOTUS indicated this insurance wouldn't be constitutional, so instead they put it under general welfare clause but then changed up their rhetoric immediately after it was found constitutional back to it being insurance again. Also the people that wrote the bill later admitted they intentionally wrote it in a confusing as way to evade public and judicial scrutiny.
- doomslayer999 7mo ago
  [flagged]
  - mothballed 7mo ago
    FDR essentially pioneered the modern use of the omnibus bill by threatening to veto any assistance to the poor/elderly that didn't include social security. Basically his goal was to make the poor starve if social security didn't pass, and blackmail politicians into being forced to vote for it. Of course this was all predicated on the other prong, which was the 'switch in time that saved 9' where he also threatened to pack the courts to ensure it was found 'constitutional'. FDR was quite ruthless in his destruction of constitutional and democratic controls, and now so much of our government depends on it that it's effectively politically impossible to unwind.

rishabhaiover 7mo ago

Google's projected AI capex spend is $170-180 billion for this year. It's unreasonable to think AI would not be a reason for companies to consider layoffs.

IgorPartola 7mo ago
There are two ways to interpret your comment: 1. Google is getting so much productivity out of their AI that they need fewer people. 2. Google is spending so much on AI they can’t afford to keep the people they need.
- PessimalDecimal 7mo ago
  I subscribe to the second point of view. Several companies fall in that bucket. Oracle comes to mind.
- rishabhaiover 7mo ago
  Google (and almost all other BigTech) is spending on scaling compute (data centers/securing power generation/chip contracts). My comment was not related to AI producivity and its impact on reduction of workforce. I believe a company spending nearly all its free cash flow on scaling compute (or borrowing money to do so) would have a different opinion on the economics of human capital.
- bayarearefugee 7mo ago
  Or 3. Google is spending so much on AI that they can't afford to keep paying people, but they are ok with this because they are convinced the AI investment will replace the people at an eventual cost savings.
  - dd8601fn 7mo ago
    That seems to have been Dorsey's approach. The business has been stagnant, so cut the roster and bet big on some future returns from AI.
fcarraldo 7mo ago

coffeefirst 7mo ago

Some of this smells purely nihilistic. The market rewarded layoffs with higher stock prices, incentivizing more layoffs.

dd8601fn 7mo ago
It sure didn't reward Atlassian. If anything it accelerated the long, downward slide.
- stefan_ 7mo ago
  Atlassian hasn't made money in 10 years. Of course they can't ride on the latest stock slop meme, that company is such an unmitigated disaster it beats even their terrible software. And now they keep spamming me with that Rovo garbage, god I hope they go down among all of this.
HDThoreaun 7mo ago
I dont think zuck cares especially much about the stock price. He's certainly not beholden to any shareholders. He's doing this because he genuinely thinks it will help the company to trim the fat.