4 ms·

The major issue, is that once people are more productive with AI, you are able to replace people because less of them are required. You see this in enterprise

by pjmlp 6mo ago

The major issue, is that once people are more productive with AI, you are able to replace people because less of them are required. 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.

ambicapter 6mo ago
This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money. > 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.
- actionfromafar 6mo ago
  Only if all roles in a company are bottlenecked in the same way. 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.
- mk89 6mo ago
  >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.
  - TheOtherHobbes 6mo ago
    Predicting which projects will be valuable, directing resources in their direction, and making sure the right people are doing the right work with as few distractions as possible is the definition of high quality management and leadership. Most managers are mediocre, and many are poor. Some are lucky for one or two projects but can't keep it up consistently. Companies with a lot of wealth often scattershot random projects - some of which are directly competitive - in the hope that one will stick. The people who have the insight and intuition to skip this and hit the mark directly are incredibly rare. A lot of business culture is a set of cargo cult "solutions" that pretend to address this problem.
- dgellow 6mo ago
  You can always find things to do but how much of that work has a positive ROI, or contributes to your business? You always have some bottlenecks, let's say implementing features was your bottleneck before AI, and you had a team of 15 product engineers with a 1y roadmap. With Claude Code a team of 5 was able to get that done in let's say 3 months. You don't magically come up with 9 months of work for 15 people right away. And your bottleneck will now be sales or something else, but your engineers won't convert to becoming sales people (or at least not all of them), and you might only need 1-2 more sales people, not 15.
  - deleted 6mo ago
    [deleted]
- jasonlotito 6mo ago
  > This sounds like an attempt to rationalize the fact that your business isn't that effective, 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.
- pjmlp 6mo ago
  So you never worked at a consulting agency working on bids for outsourced development.
- voncheese 6mo ago
  > This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money. Yes, or that businesses are expecting a slow down in the economy that hinders their ability to sell (i.e. their customers are going to cutback on spending) This was the case last year (or maybe it was the year before) where technology companies saw their customers reducing spend and tightening belts. The current economy feels hard to figure out, in that the market keeps going up but so is inflation and the struggle of the everyday American at least. Perhaps that is leading technology companies to be more conservative in how much they produce.
  - zozbot234 6mo ago
    But if we're assuming that AI is highly effective, shouldn't that lead to short-term growth in the economy as inflation drops? Shouldn't people then be expected to spend even more?
    - eru 6mo ago
      The economy is doing pretty well in most countries, yes, (modulo an oil shock).
- HDThoreaun 6mo ago
  Turns out most businesses arent very effective
- alvah 6mo ago
  "I've never worked at any company where there was any limit to the work to be done." Then you live in a bubble. Many organisations are restricted in available profitable work to be done, by many factors. Capital & cashflow, capacity & physical limits, demand, regulation & licensing, supply chains & inputs, management bandwidth, risk tolerance, access to credit, etc. etc.
jibe 6mo ago
I’ve never worked anywhere where lack of work or projects was the bottleneck. Time, headcount, and budget were always the constraints. 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.
- pjmlp 6mo ago
  Try consulting agencies, or freelancing as external contractor.
- eru 6mo ago
  And resources are limited because the cost/benefit ratio for adding more resources just isn't there for most of what's on the backlog. (Or at least that's what management thinks.) Just because the cost/benefit ratio improves a bit in one area doesn't mean that all of a sudden all projects on the backlog become worthwhile.
redwall_hp 6mo ago
If you're increasing productivity, you should be doing more and growing, yes? If you're cutting payroll costs and trying to have the same level of capacity...your business sucks and you deserve your stock tanking. 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.
- lotsofpulp 6mo ago
  The rational thing is to analyze the opportunity cost of the investment, which is dependent on the always fluctuating prices. 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.
- pjmlp 6mo ago
  In consulting you don't make magically customers out of nowhere, and there is a limited pool of customers to feed from.
  - redwall_hp 6mo ago
    Again, shortsighted. There's no reason a business has to have a single product. If you run out of customers for cars, you make HVAC and front end loaders. 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.
    - bluGill 6mo ago
      That dilutes your experience and risks losing focus on the customers you already know how to serve well and in turn can destroy your company. It works for some it fails for others.
    - prewett 6mo ago
noodletheworld 6mo ago
> 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. 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.
- pjmlp 6mo ago
  In consulting firing people “on the bench” happens regularly if the sales pipeline cannot keep everyone busy, there is only so much agencies pay from their own pocket if there are no outsourcing deals landing. In some of those well known offshoring companies, being on bench automatically means a downcut on the salary as cost measure.
  - noodletheworld 6mo ago
    > if the sales pipeline cannot keep everyone busy 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.

by pjmlp 6mo ago

ambicapter 6mo ago

This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money. > 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.

actionfromafar 6mo ago
Only if all roles in a company are bottlenecked in the same way. 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.
mk89 6mo ago
>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.
- TheOtherHobbes 6mo ago
  Predicting which projects will be valuable, directing resources in their direction, and making sure the right people are doing the right work with as few distractions as possible is the definition of high quality management and leadership. Most managers are mediocre, and many are poor. Some are lucky for one or two projects but can't keep it up consistently. Companies with a lot of wealth often scattershot random projects - some of which are directly competitive - in the hope that one will stick. The people who have the insight and intuition to skip this and hit the mark directly are incredibly rare. A lot of business culture is a set of cargo cult "solutions" that pretend to address this problem.
dgellow 6mo ago
You can always find things to do but how much of that work has a positive ROI, or contributes to your business? You always have some bottlenecks, let's say implementing features was your bottleneck before AI, and you had a team of 15 product engineers with a 1y roadmap. With Claude Code a team of 5 was able to get that done in let's say 3 months. You don't magically come up with 9 months of work for 15 people right away. And your bottleneck will now be sales or something else, but your engineers won't convert to becoming sales people (or at least not all of them), and you might only need 1-2 more sales people, not 15.
- deleted 6mo ago
  [deleted]
jasonlotito 6mo ago
> This sounds like an attempt to rationalize the fact that your business isn't that effective, 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.
pjmlp 6mo ago
So you never worked at a consulting agency working on bids for outsourced development.
voncheese 6mo ago
> This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money. Yes, or that businesses are expecting a slow down in the economy that hinders their ability to sell (i.e. their customers are going to cutback on spending) This was the case last year (or maybe it was the year before) where technology companies saw their customers reducing spend and tightening belts. The current economy feels hard to figure out, in that the market keeps going up but so is inflation and the struggle of the everyday American at least. Perhaps that is leading technology companies to be more conservative in how much they produce.
- zozbot234 6mo ago
  But if we're assuming that AI is highly effective, shouldn't that lead to short-term growth in the economy as inflation drops? Shouldn't people then be expected to spend even more?
  - eru 6mo ago
    The economy is doing pretty well in most countries, yes, (modulo an oil shock).
HDThoreaun 6mo ago
Turns out most businesses arent very effective
alvah 6mo ago
"I've never worked at any company where there was any limit to the work to be done." Then you live in a bubble. Many organisations are restricted in available profitable work to be done, by many factors. Capital & cashflow, capacity & physical limits, demand, regulation & licensing, supply chains & inputs, management bandwidth, risk tolerance, access to credit, etc. etc.

jibe 6mo ago

I’ve never worked anywhere where lack of work or projects was the bottleneck. Time, headcount, and budget were always the constraints. 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.

pjmlp 6mo ago
Try consulting agencies, or freelancing as external contractor.
eru 6mo ago
And resources are limited because the cost/benefit ratio for adding more resources just isn't there for most of what's on the backlog. (Or at least that's what management thinks.) Just because the cost/benefit ratio improves a bit in one area doesn't mean that all of a sudden all projects on the backlog become worthwhile.

redwall_hp 6mo ago

If you're increasing productivity, you should be doing more and growing, yes? If you're cutting payroll costs and trying to have the same level of capacity...your business sucks and you deserve your stock tanking. 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.

lotsofpulp 6mo ago
The rational thing is to analyze the opportunity cost of the investment, which is dependent on the always fluctuating prices. 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.
pjmlp 6mo ago
In consulting you don't make magically customers out of nowhere, and there is a limited pool of customers to feed from.
- redwall_hp 6mo ago
  Again, shortsighted. There's no reason a business has to have a single product. If you run out of customers for cars, you make HVAC and front end loaders. 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.
  - bluGill 6mo ago
    That dilutes your experience and risks losing focus on the customers you already know how to serve well and in turn can destroy your company. It works for some it fails for others.
  - prewett 6mo ago

noodletheworld 6mo ago

> 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. 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.

pjmlp 6mo ago
In consulting firing people “on the bench” happens regularly if the sales pipeline cannot keep everyone busy, there is only so much agencies pay from their own pocket if there are no outsourcing deals landing. In some of those well known offshoring companies, being on bench automatically means a downcut on the salary as cost measure.
- noodletheworld 6mo ago
  > if the sales pipeline cannot keep everyone busy 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.