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Yes, I'm not buying this story about layoffs due to AI. It's a convenient excuse, which these companies seem to be getting away with too. And something else I

by chrsw 5mo ago

Yes, I'm not buying this story about layoffs due to AI. It's a convenient excuse, which these companies seem to be getting away with too. And something else I don't get about these AI related layoff announcements: if AI was a productivity boost wouldn't you hire more engineers and technical staff to capture the value? Or else you're basically saying "we're a tech company that has no idea what to do with more super-engineers".

henryfjordan 5mo ago
The layoffs being "due to AI" is usually about freeing up the budget to build a couple datacenters and buy GPUs. And they have to layoff 14% of their workforce because they are buying those GPUs at many times the normal price thanks to the zeitgeist. They aren't saying that they don't know what to do with the AI productivity boost, but rather they think it worth taking a huge productivity hit right now so they can invest in the future. Whether their vision of the future is realistic...
jqbd 5mo ago
This assumes they had a deficit of engineers pre-AI. What if they had as much as they needed?
- lmm 5mo ago
  If engineering ability actually became cheaper you would want more of it, as ideas that were previously too marginal became worthwhile.
  - zhivota 5mo ago
    This assumes you have more valuable ideas than you can implement. Which, at first glance, seems like something you can take for granted. But in my career over 15 years I was surprised to find it's not the case for most established businesses. The existing business acts as a constraint that limits the idea space way down, and the ability for owners and product managers to generate ideas is way lower than I ever expected. Execution of unrelated ideas seems like a natural follow on, and having managed several such "labs" efforts, it's actually a good idea but it inevitably grinds up against the lack of will to continue investing in the face of headwinds, especially since the main business line is several orders of magnitude larger than anything labs can deliver in a foreseeable timeframe.
ManuelKiessling 5mo ago
Reading only the parts of the post that are not about AI does not instill the sense that Mr Armstrong is the kind of person who would hesitate to say that people are let go because the company wants/needs to save money.
- notahacker 5mo ago
  Saying they're being let go due to the amazing efficiency of AI juices the stock prices more though.
  - quadrifoliate 5mo ago
    This. Until we get regulations on AI-related layoffs, even the cheese making company will claim that their regular layoffs are to "invest more in AI".
Akababa 5mo ago
There are diminishing returns to more engineers. Also hiring more is like investing with leverage. You might increase EV but also increase the chance of going bust if things go poorly.
missedthecue 5mo ago
At this point, I truly do not believe there is anything that could happen that would convince HN that LLMs reduce demand for engineering labor hours.
- strix_varius 5mo ago
  Because the data shows exactly the opposite? https://www.businessinsider.com/ai-isnt-killing-software-coding-jobs-booming-trueup-2026-4 https://www.businessinsider.com/ai-isnt-killing-software-cod...
  - missedthecue 5mo ago
    If it were 2018 I would personally have hired at least 3 devs at my company in the last 18 months. The only reason I haven't is due to the existence of LLMs. Not budget, not covid overhiring. Not soft demand. I literally do not need more engineer butts in seats. It is not longer a bottleneck. The only way I can rationalize that so many people refuse to believe this is happening is that they are on the seller side and not the buyer side of engineering labor. This means they have blind sides to the buyers view of the market (some sort of information asymmetry), and secondly they exhibit cognitive dissonance to protect their self-esteem as a seller.
    - strix_varius 5mo ago
      > The only way I can rationalize that so many people refuse to believe this is happening is that they are on the seller side and not the buyer side of engineering labor. This means they have blind sides to the buyers view of the market (some sort of information asymmetry), and secondly they exhibit cognitive dissonance to protect their self-esteem as a seller. This is an interesting response when faced with concrete data that the buy-side of engineering is actively heating up in direct correlation with LLM adoption. An alternative interpretation of your observation is that perhaps your company has particular traits that are helped more by LLMs than the average eng org. There's a growing SWE consensus that LLMs boost productivity by 10-20%. However, there are contributing factors that can make LLMs much more of a human replacement: * Selling labour & services, rather than engineered software. ie an agency that builds customized versions of well-understood software, rather than net new capabilities. * Selling software that has a low ceiling of complexity and a short half-life, such that LLMs can realistically architect & maintain it over its useful lifetime.

by chrsw 5mo ago

henryfjordan 5mo ago

The layoffs being "due to AI" is usually about freeing up the budget to build a couple datacenters and buy GPUs. And they have to layoff 14% of their workforce because they are buying those GPUs at many times the normal price thanks to the zeitgeist. They aren't saying that they don't know what to do with the AI productivity boost, but rather they think it worth taking a huge productivity hit right now so they can invest in the future. Whether their vision of the future is realistic...

jqbd 5mo ago

This assumes they had a deficit of engineers pre-AI. What if they had as much as they needed?

lmm 5mo ago
If engineering ability actually became cheaper you would want more of it, as ideas that were previously too marginal became worthwhile.
- zhivota 5mo ago
  This assumes you have more valuable ideas than you can implement. Which, at first glance, seems like something you can take for granted. But in my career over 15 years I was surprised to find it's not the case for most established businesses. The existing business acts as a constraint that limits the idea space way down, and the ability for owners and product managers to generate ideas is way lower than I ever expected. Execution of unrelated ideas seems like a natural follow on, and having managed several such "labs" efforts, it's actually a good idea but it inevitably grinds up against the lack of will to continue investing in the face of headwinds, especially since the main business line is several orders of magnitude larger than anything labs can deliver in a foreseeable timeframe.

ManuelKiessling 5mo ago

Reading only the parts of the post that are not about AI does not instill the sense that Mr Armstrong is the kind of person who would hesitate to say that people are let go because the company wants/needs to save money.

notahacker 5mo ago
Saying they're being let go due to the amazing efficiency of AI juices the stock prices more though.
- quadrifoliate 5mo ago
  This. Until we get regulations on AI-related layoffs, even the cheese making company will claim that their regular layoffs are to "invest more in AI".

Akababa 5mo ago

There are diminishing returns to more engineers. Also hiring more is like investing with leverage. You might increase EV but also increase the chance of going bust if things go poorly.

missedthecue 5mo ago

At this point, I truly do not believe there is anything that could happen that would convince HN that LLMs reduce demand for engineering labor hours.

strix_varius 5mo ago
Because the data shows exactly the opposite? https://www.businessinsider.com/ai-isnt-killing-software-coding-jobs-booming-trueup-2026-4 https://www.businessinsider.com/ai-isnt-killing-software-cod...
- missedthecue 5mo ago
  If it were 2018 I would personally have hired at least 3 devs at my company in the last 18 months. The only reason I haven't is due to the existence of LLMs. Not budget, not covid overhiring. Not soft demand. I literally do not need more engineer butts in seats. It is not longer a bottleneck. The only way I can rationalize that so many people refuse to believe this is happening is that they are on the seller side and not the buyer side of engineering labor. This means they have blind sides to the buyers view of the market (some sort of information asymmetry), and secondly they exhibit cognitive dissonance to protect their self-esteem as a seller.
  - strix_varius 5mo ago
    > The only way I can rationalize that so many people refuse to believe this is happening is that they are on the seller side and not the buyer side of engineering labor. This means they have blind sides to the buyers view of the market (some sort of information asymmetry), and secondly they exhibit cognitive dissonance to protect their self-esteem as a seller. This is an interesting response when faced with concrete data that the buy-side of engineering is actively heating up in direct correlation with LLM adoption. An alternative interpretation of your observation is that perhaps your company has particular traits that are helped more by LLMs than the average eng org. There's a growing SWE consensus that LLMs boost productivity by 10-20%. However, there are contributing factors that can make LLMs much more of a human replacement: * Selling labour & services, rather than engineered software. ie an agency that builds customized versions of well-understood software, rather than net new capabilities. * Selling software that has a low ceiling of complexity and a short half-life, such that LLMs can realistically architect & maintain it over its useful lifetime.