alt Hacker NewsMy extremely cynical, but not yet proven wrong view:
Tech, more or less, has a group of investors centered around Silicon Valley. Not the only ones, but especially now, the most active. Generally, these folk have a lot of exposure to AI, and probably mostly believe the hype around it.
Which means they believe companies using AI should produce better results, which in the current market means short-term cash. So if a company doesn't do layoffs, no matter how well it is doing, it is seen as irresponsible and investment is withheld from it.
GitLab's announcement felt illustrative of this dynamic:
- The actual reductions were focused on simplifying org structure, nothing to do with AI
- They identified MORE work that was on their roadmap because of the way AI is changing software engineering
- They made sure to include a special section for investors
Seems to me they should have made the org changes in an unrelated announcement, and celebrated the opportunity for new work and the possible hiring that might be required to accomplish it all.
Like, GitLab is in an incredible position to moonshot the next generation of software. AI needs new substrate to work most effectively, and GitLab is the most popular "alternative" substrate to the fragile dinosaur that Github has become.
But AI needs to be seen as cutting costs above all else, so they can sell more of it everywhere, and this is what we get.
Replies
We use GitLab. They are no way in an incredible position to moonshot anything. They are yet another git provider with a management plane around it.
> GitLab is in an incredible position to moonshot the next generation of software.
I don't think they offer anything unique. Forgejo[1] offers a similar platform.
>My extremely cynical, but not yet proven wrong view
1. FAANG does something that's relevant to their company.
2. Everyone thinks that this is an universally good move because they're FAANG.
3. Market rewards copying FAANG regardless whether that strategy also applies to your company.
Simple as that.
Yours is not just cynical but also wrong and naive. Here's a simpler one: all evidence points to AI bringing at least 10-20% more productivity. This means some companies will lay off. You don't need sophisticated cynicism when a simpler explanation is available.
I agree with you. Putting myself in the shoes of a tech CEO, I see other companies laying off and saying that their AI strategy made them so productive that they don't need 20% of their employees anymore, I see investors flocking to that company, I look at my company and feel investor FOMO, I layoff as well.
It's nothing personal, it's just how the US works. If this were to happen in Europe, your company would burn to the ground. The amount of compensation you'd have to do would eat your gains from the layoffs.