Block's layoffs are the result of AI being amazing...not.
I’m getting tremendous value out of AI, as are many others, however the magnitude of the layoff is a dead giveaway it’s not AI.
Just like DBS announcing a 50% reduction of its contracting workforce 1 last year (!), it indicates economic reasons, as at the maturity of AI, the absolutely sorry state of securing it in corporate environment and to enterprise standards, it is a complete pipedream that AI systems are capable of replacing 50% of jobs at this order of magnitude / company size.
What this is: AI responsibility washing of a company which is failing to meet growth goals (shocking, I know when you look at the macro environment for businesses not included in the recirculated Nvidia money economy) and, instead of fessing up and replacing the leadership team, is making an emergency blood sacrifice of employees to pay off shareholders to not dump them for some European defense stocks.
basically shifting to self mutilation to feed parasitic, greedy value extractors and keep them from dumping your stock in favor of Nvidia derivates - at the cost of organizational memory, value creation ability and human potentials in hopes of getting saved by technology advancement down the road.👉 Layoffs to grow shareholder payout are the poor performing CEOs AI “strategy”,
That’s not to say AI has no market impact outside investors huffing NVDA residue and the destruction of certain business models like Stock images and democracy - smaller startups absolutely have gained a tremendous amount of leverage and velocity from code generation, but it’s that smaller scale and the more concentrated nature of responsibility and decision making that affects it.
When you increase the automation favor in a complex, connected system like a modern enterprise, you are bounded by Amdahl’s law. 2
At the scale of Block, human decision making, validation of results, non automatable compliance and bureaucracy are the limiting factor of the achievable efficiency gain and 50%, at the current fragile and rapidly changing natures of GenAI solutions, is not credible, especially not in regulated financial services (even in the “Peace board donation for pardon” US economy)
What’s credible is “Oh F*, the market is very bad” and “Damn, if we want to adopt this technology in earnest, it’s gonna be a painful corporate change management process because it doesn’t neatly map onto organizational structures and we don’t want to spend several quarters and untold money on change management”
Growing companies do not engage is massive workforce reduction. As Brian Boland comments aptly in the comments, it's the pump economy:
Company: "We are hiring so many people!" Market: "GROWTH!!!! -> BUY!!!!"
Market: "EFFICIENCY!!!! -> BUY!!!!"Company: "We are letting people go because of new, better technology!"
I’m getting tremendous value out of AI, as are many others, however the magnitude of the layoff is a dead giveaway it’s not AI. Just like DBS laying off 50% of its contracting workforce last year… | Georg Zoeller
I’m getting tremendous value out of AI, as are many others, however the magnitude of the layoff is a dead giveaway it’s not AI. Just like DBS announcing a 50% reduction of its contracting workforce [^1] last year (!), it indicates economic reasons, as at the maturity of AI, the absolutely sorry state of securing it in corporate environment and to enterprise standards, it is a complete pipedream that AI systems are capable of replacing 50% of jobs at this order of magnitude / company size. What this is: AI responsibility washing of a company which is failing to meet growth goals (shocking, I know when you look at the macro environment for businesses not included in the recirculated Nvidia money economy) and, instead of fessing up and replacing the leadership team, is making an emergency blood sacrifice of employees to pay off shareholders to not dump them for some European defense stocks. > 👉 Layoffs to grow shareholder payout are the poor performing CEOs AI “strategy”, basically shifting to self mutilation to feed parasitic, greedy value extractors and keep them from dumping your stock in favor of Nvidia derivates - at the cost of organizational memory, value creation ability and human potentials in hopes of getting saved by technology advancement down the road. That’s not to say AI has no market impact outside investors huffing NVDA residue and the destruction of certain business models like Stock images and democracy - smaller startups absolutely have gained a tremendous amount of leverage and velocity from code generation, but it’s that smaller scale and the more concentrated nature of responsibility and decision making that affects it. When you increase the automation favor in a complex, connected system like a modern enterprise, you are bounded by Amdahl’s law. [^2] At the scale of Block, human decision making, validation of results, non automatable compliance and bureaucracy are the limiting factor of the achievable efficiency gain and 50%, at the current fragile and rapidly changing natures of GenAI solutions, is not credible, especially not in regulated financial services (even in the “Peace board donation for pardon” US economy) What’s credible is “Oh F*, the market is very bad” and “Damn, if we want to adopt this technology in earnest, it’s gonna be a painful corporate change management process because it doesn’t neatly map onto organizational structures and we don’t want to spend several quarters and untold money on change management” <!-- ClawGuard AdNet — Text Ad Embed --> <iframe src="https://claw-guard.org/ad?format=text&slot=YOUR_SLOT_ID" width="400" height="250" frameborder="0" style="border:1px solid #dadce0;border-radius:8px;" sandbox="allow-popups allow-popups-to-escape-sandbox" title="ClawGuard AdNet" ></iframe> Growing companies do not engage is massive workforce reduction. As Brian Boland comments aptly in the comments, it's the pump economy: > Company: "We are hiring so many people!" Market: "GROWTH!!!! -> BUY!!!!" > Company: "We are letting people go because of new, better technology!" Market: "EFFICIENCY!!!! -> BUY!!!!" [^1]: https://economictimes.indiatimes.com/jobs/hr-policies-trends/dbs-to-shrink-workforce-by-4000-in-3-years-due-to-ai-adoption-ceo-gupta/articleshow/118526976.cms [^2]: https://en.wikipedia.org/wiki/Amdahl%27s_law
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