General Politics Discussion (X) [ARCHIVED] • Page 662

Nobody wants to work anymore.

 

I know I sure don't, he says in his office at work.

 

i don't want ai to knock me out of a banking job bros

 

AI has very little to do with it. It's mostly about, oddly enough, growing too much during the pandemic and thinking those same trends were going to last forever and Wall Street, as they always do, abruptly shifting from "Grow, grow, grow!!! We don't care how much it costs!" to "Profit, profit, profit! We don't care how much it costs!"

 

A lot of the banking ones are more on their mortgage side of things I am not mistaken, which yeah the housing market was not going to stay red hot like that forever.

 

Yeah, I was focusing more on the tech side. But yeah, the banking one is pretty obvious, the prime interest rate is nearly 2.5 times what it was 1-2 years ago so mortgage and other lending related jobs are going to disappear.

 

That's an evergreen technique in tech you're not wrong but I'm not convinced that's the whole story with these massive tech firms. I definitely think you'll be seeing huge investments in AI meaning more layoffs. Billions of dollars of investments isn't something they're going to pull out of nowhere. I honestly don't even think it's that conspiratorial - this has been coming for a long time.

Maybe I'm wrong and this would have happened anyways but that's why I'm looking at what's happening in banking since they have the most motivation to adapt sooner.

 

Just as one example, Microsoft had nearly $100 billion dollars in cash on hand at the end of 2022. Nothing about their AI investment required them to layoff people, especially since, at least in the short-term, that investment is being leveraged on the product side to sell more features to customers and make them more money.

There was a growth opportunity during the pandemic and that opportunity is ending/has ended so now the workforce is not needed as much.

 

And to follow up, I don't think you're wrong that these companies will say that's why they're doing this. They can't and won't say that they fundamentally misjudged their business model and growth opportunities, over-hired, and now have to shrink. That would get them in trouble with shareholders, cause lawsuits, etc. So they find a way to spin it, AI is super-buzzy right now, perfect story!

 

It's probably a mix of both -- a lot of the tech layoffs aren't a "go invest the money you were spending on payroll into other things" but instead "spend less on payroll so you show higher profits to make investors happy". But I also do think you're seeing companies ramping up their AI investments and like you said that money has to come from somewhere. And economic downturn as an excuse to do layoffs is certainly one way to free up some money.

 

From its fiscal year-end in September 2019 to September 2022, Apple’s workforce grew by about 20% to approximately 164,000 full-time employees. Meanwhile, over roughly the same period, the employee count at Amazon doubled, Microsoft’s rose 53%, Google parent Alphabet Inc.’s increased 57% and Facebook owner Meta’s ballooned 94%.

Source

That, to me, looks like extremely bad management and over-hiring. Doubt the people with the huge salaries that made those hiring calls will be the ones responsible during any layoffs though.

 

fair point, and we're at the inflection point of AI sentiment. AI hype is mostly justified though, will affect every single industry and be worth trillions of dollars, I think these firms know this and are adjusting.

 

Tech has been doing this for a while but I've been curious what happened that escalated this so much during the pandemic.

 

I think it's also important to know that while AI is "so hot right now" its still in its relative infancy, is very limited in what it can do, and has only improved incrementally. The main thing that's happened over the past year or so is that the public has been given the chance to play around with it and try it, so that begins to normalize it and it can be incorporated into more things we use, both for work and personally.

 

Personal theory: When one big company does it the others all follow in a herd, and they all thought if they didn't then the others would, so they went on a spree hoping to keep their rivals from getting someone and thinking because Google was hiring, Meta should, and Amazon saw that and it spiraled.

 

A similar thing happens with layoffs. Once one company does it, other similar companies have cover to do the same thing because they can blame it on "broader macro-economic trends affecting our sector" instead of "whoopsie, we thought we would keep growing at that clip forever, who knew all good things must end!?"

 

Seems weird to be defending giant corporations from laying off tons of people but maybe that’s just me.

 

hmm I don't think anyone here is defending them.

 

Yep, specifically to goose the bottom line.

Facebook parent Meta Platforms said in its quarterly earnings statement on Wednesday that it has increased its share repurchase authorization by $40 billion.

In 2022 the social network operator bought back about $28 billion in stock, according to the statement.

[…]

Meta’s fourth-quarter results surpassed analysts’ revenue estimates, which helped send shares up more than 17% after hours.

Before increasing its buyback fund, it had nearly $11 billion remaining.

I am going to take a brave punt that shareholders were less jazzed about revenue modestly exceeding expectations and — and this is just a hunch — their excitement may actually come from this massive share buyback scheme, which comes just a few months after announcing the layoffs of thousands of workers. Paying for those severace packages is part of the $4.2 billion of “restructuring” costs from 2022, and Meta is reportedly not finished with dismissing staff. It sure looks cruel to spend another $40 billion to prop up the share price shortly after upending the lives of eleven thousand people — some of whom are probably in the United States on a work visa — but maybe I am too soft for capital-B Business.

 

meta is a good experiment to see if you can really throw enough money at something to make it happen even when no one wants it. such a dumb company.

 

meta was such a dumb idea. vr is never going to happen