What if CEOs are right
Published: 13 Mar 26 05:01 UTC
Last Updated: 13 Mar 26 05:08 UTC
Many large companies are laying off a bunch of people. This has been going on pretty consistently for the last year now.
The news hasn't been great reading for those working in tech. If you're a doomer like me, you occassionally visit layoffs.fyi to see what the latest company to layoff a bunch of people/offshore roles and "attribute" it to efficiency gains from AI.
I won't post about how AI is a smokescreen for offshoring, overhiring and CFO/CEOs worrying about next quarter's earnings call. I don't think that's terribly interesting and I'm sure many people have spoken about the same thing.
What I think is morbidly fun, is to consider the end result of these CEOs being right.
What if the value of AI is truly transformational and has already been partially/fully captured by these companies? What if you really can run your business on a fraction of the original staff? What might that fresh dystopian hell look like?
Disclaimer: All of the following nonsense is me being facetious. I have not researched any of these claims. It is not intended to be a serious discussion about capitalism, the extinction of the middle-class or the fall of the West.
Who will B2C companies sell to?
Let's say AI is super efficient and can reduce 50% of headcount without consequence.
If you lay off about 50% of white collar professionals, what happens to all those companies that are fighting for retail/consumer dollars? Are there enough jobs out there that will pay the same amount as before? I don't think so.
CEOs love to yap about more jobs being created.
But 50% of white collar professionals out of their old job/retraining to be something else? That's a hell of a lot of people fighting over the jobs that haven't been displaced by AI. More workers, fewer jobs = less money sloshing around.
So a significant proportion of the economy is now much poorer. There are just fewer dollars to go around on discretionary goods and services. Displaced profressionals can't afford luxuries like fresh food.
The only companies that thrive are the ones that cater to the super-rich as wealth becomes even more concentrated in a select few. Super yachts, super cars, fancy watches. Brunello Cucinelli.
People start eating into their savings just to get by. The only B2C companies left are predatory lending companies.
But all the brain work (risk, pricing, segmentation, marketing) can be done algorithmically. It's just maths and following glorious MBA business case studies and playbooks. Customer service, why would you spend any money on that? Chatbots, baby.
So all you really need is a bunch of heavies to break people's kneecaps when they can't pay up. Economy saved.
B2B though?
The only B2C companies left are predatory lenders.
But what about B2B? That's still a bastion of hope in this hellish landscape?
Nah. SaaS is dead. A handful of wage-slaves employed at the predatory lending companies can just vibe-code up any SaaS product they need.
Only AWS/GCP/Azure thrive. Everything at those companies runs via automation. The majority of other B2B companies just don't have a target market any more. B2B services companies die.
There's still a market for B2B products. But only things like heavy machinery and parts for things that help make servers and data centres. Everything else is pointless/doesn't have a good enough return on investment.
Even so, there's still not enough manufacturing/construction/fabrication activity to support 50% of white collar professionals laid off.
Anarchy. Riots. Humanity tears itself apart.
Conclusion
If CEOs are right, even if the numbers aren't as dramatic and are closer to 10% reduction of white-collar jobs, that would still be a significant impact to any economy.
As a doomer, I do think that only the VCs can save us (lol). My simplistic hypothesis is that all the VCs that are throwing billions at AI companies are eventually going to want a return.
I think the days of charging $5 per million tokens can't last forever. I don't think AI lends itself to having a competitive market, since developing these models (and provisioning the hardware required to run them) are incredibly expensive.
I have no idea what the pricing will be in future. But if a developer currently uses $6 a day, and pricing gets closer to say, $5 per 10k tokens, then only the already very-well capitalised businesses can afford to use AI. Even if your workforce gets cut by 50%, AI is now 50x more expensive than it used to be.
So it probably won't be wasted on people generating dumb images or proof-reading Powerpoint slides.
So only 10% of the worldwide white-collar professional roles are going to be eliminated?
Economy saved.