The Tech Job-apocalypse is just outsourcing, with an AI coat of paint.
Once you create downward wage pressure with coordinated layoffs you create a chain reaction, at least in an environment with no labor power (unions) to counterbalance:
After 3 years of sustained layoffs kicked off by Elon and joined by everyone else, TC across the industry is down between 30-50% (ignore the noise about a few AI lab outliers).
Now you got an opportunity to cycle your entire employee base, over time, to the new lower benchmark through successive fire and rehire, the second part usually at a cheaper location in Southeast Asia and Eastern Europe.
As most people in tech layoff groups have figured out by now that recruiters for temp contract firms will start flooding inboxes with job profiles matching active employees at Meta and other companies but lower comp, rank and no equity before these people are even informed of their fate.
It’s just capitalism at this point - if you’re paid 50% more than what desperate people in the streets locked into bay area mortgages are willing to work for, you’re gonna have cross on your back, a very big one if you’re sitting on millions of unvested equity the company gets to claw back and hand to shareholders.
⚠️ See also AI CHRO, a performance art project allowing every HR professional to plan Big Tech Style investor pleasing layoffs for their workforces)
So while this graph in the linked post is functionally not incorrect, it doesn’t support the “calm down” conclusion if you’re an industry worker in a high cost location or somehow expect your career trajectory to be only temporarily inconvenienced.
This pattern, via AI narrative has infected other industries by now. Klarna, the European fintech unicorn, told investors they would replace everyone with AI while relocating the jobs to Poland.
Banks in AU have been caught doing the same thing, telling public and government stories about AI efficiency to cover up cost cutting to juice investor payouts.
We can argue that this all is a terrible idea that hollowed out leading industry and companies by depriving them of institutional knowledge and skill and we would be right …. but that didn’t stop the exact same thing playing out at Boeing. Or Intel - outsourcing and value extraction via stock buyback thay have left these companies in shambles and reliant on protectionism and national security / defense pork.
Guess which industry is aggressively joining exactly the same feeding frenzy right now?
It’s also not clear where the floor is - the bros in charge of the industry will keep digging for it. Absent organized labor there’s no credible force that can arrest this trend as the market is dysfunctional.
Quality issues? Nice thought but one look at what Microsoft is shipping and continues to cut people should disabuse anyone from hope. Monopoly lol.
Sorry, there’s no uplifting punchline here except that the AI emperor has no clothes and that capitalism is doing what it is programmed to do absent regulatory guardrails.
I explained this before: Once you create downward wage pressure with coordinated layoffs you create a chain reaction, at least in an environment with no labor power (unions) to counterbalance: After… | Georg Zoeller
Once you create downward wage pressure with coordinated layoffs you create a chain reaction, at least in an environment with no labor power (unions) to counterbalance: After 3 years of sustained layoffs kicked off by Elon and joined by everyone else, TC across the industry is down between 30-50% (ignore the noise about a few AI lab outliers). Now you got an opportunity to cycle your entire employee base, over time, to the new lower benchmark through successive fire and rehire, the second part usually at a cheaper location in Southeast Asia and Eastern Europe. As most people in tech layoff groups have figured out by now that recruiters for temp contract firms will start flooding inboxes with job profiles matching active employees at Meta and other companies but lower comp, rank and no equity before these people are even informed of their fate. It’s just capitalism at this point - if you’re paid 50% more than what desperate people in the streets locked into bay area mortgages are willing to work for, you’re gonna have cross on your back, a very big one if you’re sitting on millions of unvested equity the company gets to claw back and hand to shareholders. ⚠️ See also [AI CHRO](https://ai-chro.org), a performance art project allowing every HR professional to plan Big Tech Style investor pleasing layoffs for their workforces) So while this graph in the linked post is functionally not incorrect, it doesn’t support the “calm down” conclusion if you’re an industry worker in a high cost location or somehow expect your career trajectory to be only temporarily inconvenienced. This pattern, via AI narrative has infected other industries by now. Klarna, the European fintech unicorn, told investors [they would replace everyone with AI](https://www.businessinsider.com/klarna-ceo-sebastian-siemiatkowski-ai-jobs-2024-12) while [relocating the jobs to Poland](https://www.finextra.com/newsarticle/45111/klarna-to-hire-100-engineers-for-new-tech-hub-in-poland). Banks in AU have been [caught doing the same thing](https://www.msn.com/en-us/money/news/australian-bank-rehires-workers-replaced-by-ai-after-lying-about-chatbot-success/ar-AA1L1F60), telling public and government stories about AI efficiency to cover up cost cutting to juice investor payouts. We can argue that this all is a terrible idea that hollowed out leading industry and companies by depriving them of institutional knowledge and skill and we would be right …. but that didn’t stop the exact same thing playing out at Boeing. Or Intel - outsourcing and value extraction via stock buyback thay have left these companies in shambles and reliant on protectionism and national security / defense pork. Guess which industry is aggressively joining exactly the same feeding frenzy right now? It’s also not clear where the floor is - the bros in charge of the industry will keep digging for it. Absent organized labor there’s no credible force that can arrest this trend as the market is dysfunctional. Quality issues? Nice thought but one look at what Microsoft is shipping and continues to cut people should disabuse anyone from hope. Monopoly lol. Sorry, there’s no uplifting punchline here except that the AI emperor has no clothes and that capitalism is doing what it is programmed to do absent regulatory guardrails.
linkedin.com Further Reading
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