Posted by ahmedomran8 9 hours ago
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.
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.
https://www.tomshardware.com/tech-industry/south-korean-offi...
https://www.tomshardware.com/tech-industry/sk-hynix-employee...
SK Hynix is making an absurd amount of money from the RAM shortage, and the employees are not unreasonably demanding their cut from it.
GitLab has just as many outages, just nobody notices/cares so much
I don't think they offer anything unique. Forgejo[1] offers a similar platform.
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.
I think it goes a little deeper than that. In ways that seem to echo in your description of GitHub vs GitLab too.
Big Tech doesn't seem to attempt to generate value. The most positive attribute you can ascribe to a silicon valley startup is "disruptive" which in effect means eating somebody elses lunch. I think this is pretty natural for an industry that has pretty much achieved perfect penetration, but we're still dimensioning the industry for massive growth.
In that framework, silicon valley startups have to identify some sort of frontier they can expand into, and with pretty much all productive enterprise already interfaced with technology. They have to expand into simply replacing labor.
I have seen data going both ways.
From what I'm seeing at the Co I work for with ~1300 devs, productivity is more or less the same as it has always been. Projects aren't being done noticeably faster, there's no less bugs than before (if anything things are more unstable), the backlog remains endless. And we do all the crap that the AI hype tells us to do, we've got harnesses, complex agentic setups etc.
I don't know if this is the case, or maybe it's just part of it.
If AI is really eating these jobs, and AI is getting better by leaps and bounds, what what point can I (or Anthropic, Google, OpenAI, etc.) just task Claude with "Build a company just like Cisco" and it does it, only it doesn't have ~$30.1 billion in total debt like the real Cisco.
Interesting decision considering they aren't at any sort of risk.
Note the "you delivered"...
---
A few lines later
"With this, we are making changes today that will result in the reduction of our overall workforce in Q4 by fewer than 4,000 jobs"
Rough, bit on the nose no?
All that observability tooling around is only benefiting ai wave . They can vibe re-write everything .
But I agree though, this is an artificial stock pump because of the rush for picks and shovels.
I guess when they said "insert token" they meant "insert quarter" and by "insert quarter" they meant "insert your entire fiscal quarter".
* Build for the future (Cloudflare)
* Our path forward (Cisco)
What else did we miss?
* More Human
as they've slowly laid off people due to the AML fines they've been dealing with in the U.S. and replacing folks with either AI, more Indian/Canadian/Ireland talent.
25% unemployment doesn't seem like something to brag about.
Also, 75% placement seems wildly successful. Why isn’t Cisco also a head hunting firm?!
I believe it's because they truly didn't think that way.
(Edit - I wouldn’t have minded either line, at first glance on mobile, curious if it’s an “all bad” situation for you)
writing so bad claude could do better
I wonder if someone in the C-suite simply decided that they had some rough percentage of underperformers on the payroll, but they can’t publicly call them performance based terminations without triggering a risk of lawsuits.