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RE: Jack Dorsey is laying off 4,000 of 10,000 employees at Block Inc. Precursor of AI mass-layoffs?
They fire 6k skilled workers to code with AI. Those same seniors with business knowledge and skills can use the same AI to build competitors. If 1% of the laid off employees start competing you have 60 competitors. If 1 in 100 competitors succeed there is a 60% change you will get a succesful competitors.
I have a theory, I don't believe too strongly but is possibility, that is if interest rates go down companies will start hiring not to be more productive (they will even if it doesn't scale) but because anyone who is not employed is possibly creating a competitor.
AI is new, millions of people are creating side projects, it is reasonable to expect a couple hundred, or thousand, of them to succeed and start hiring and competing with giants.
Layoffs and AI are not just increasing productivity and lowering costs (by firing people) but also possibly creating the next generation os competitors and products. If I were a stablished company I would care less about my employees and more about what millions of people are possibly doing and how can I avoid being replaced (and the answer is having humans on the payroll)
Interesting point, hiring more engineers than needed to avoid the competitors getting those engineers or those founding new competing startups, but don't think that the laid off workers can easily compete against a multi-billion company.
They can't exactly but it is a numbers game, lay off a million people, a million people vibe code something, statistically some will succeed and compete.
Henry Ford in the USA used to pay double the salaries, some say it was to drive up the economy but also it also served to starve the competition from workers so he got all the skilled workers and the competition struggled to keep up.