Tech companies seem to be falling over each other these days in firing people to either replace them with AI or to pay to build AI infrastructure. Wouldn’t it be nice if they at least waited until AI actually worked for business?
On the one hand, top tech businesses such as Amazon, Block, Cisco, Cloudflare, and Meta have all announced that they’re slashing payrolls — either because AI can do the same work as people or they need the cash to build out their AI infrastructure. Isn’t that great? All together, of the 37,638 tech job cuts so far this year, 47.9% — almost half — can be tracked back to AI.
On the other hand, despite all the AI hype and hysteria, no one has yet proven that AI is, generally speaking, really all that helpful for businesses. Oh, I know, I know. You did great things with OpenClaw vibe programming. Microsoft’s CEO, Satya Nadella, claims 20% to 30% of the company’s code was written by AI. And Nvidia assures us that 88% of its surveyed customers report AI has increased their revenues.
But really, what else would they say? “Dear Board, we just blew half a billion bucks on Nvidia GPUs, and we’re losing money hand over fist?” I don’t think so.
The truth is, as an IDC study reports, a mind-boggling 88% of proof-of-concept AI projects never reach production. Lest we forget, MIT’s The GenAI Divide: State of AI in Business 2025 study found that 95% of AI projects fail to deliver measurable P&L impact.
Now, I have to acknowledge that AI is finally becoming truly helpful in business. As a guy who knows a thing or two about programming, Linus Torvalds, creator of Linux and Git, said at Open Source Summit North America, “I’m personally 100% convinced that AI is changing programming.” He estimates that “AI will increase your productivity by a factor of 10.”
But is that reason enough to slash make workforce cuts of between 10% to 40%? (Short answer: No. Longer answer: Noooo!)
It’s not just the mass firings. Workers who are either awaiting the axe, or have escaped it for the moment, are miserable. As one Meta employee told The San Francisco Standard, “I tend to cry in the shower,” and, “A lot of my feelings about my job are about the general chaos and not just the layoffs. ”
So, explain this to me: When everyone knows AI-driven layoffs are coming, exactly how well do you expect them to work? You really think they can give their best?
Making matters worse, it’s an open secret that IBM, Google, and Meta are having their employees train their AI replacements. As a popular meme puts it, workers are now “building your own coffin.” Is it any wonder that a lot of people — 29% of all employees and 44% among Gen Z workers — are deliberately sabotaging work when the boss insists they train their AI replacements?
It also sure doesn’t help office morale when the CEO keeps saying AI will replace half of all employees. A particularly egregious example of this was when Standard Chartered CEO Bill Winters proclaimed his bank would slash thousands of jobs and replace “lower-value human capital” with AI.
He’s since backed off the claim, but come on — we all know he meant it. Just like all the other CEOs who’ve said similar things, between FOMO and the knowledge that AI job news is sure to make the stock price jump, they’re eager to cut headcounts and boast about how successful AI will make them.
What happens a few quarters down the road? Their attitude today seems to be let tomorrow take care of tomorrow. I hate to tell them, but that really doesn’t work in the long run. (Not, mind you, that a future much farther ahead than the next quarter seems to matter much anymore to business executives.)
It should. As a recent Deloitte study stated: “Most respondents reported achieving satisfactory ROI on a typical AI use case within two to four years. This is significantly longer than the typical payback period of 7seven to 12 months expected for technology investments. Only 6% reported payback in under a year, and even among the most successful projects, just 13% saw returns within 12 months.”
AI, in short, is not the miracle cure for what ails businesses that its fans claim.
Will that stop businesses? I doubt it. While I appreciate that California Gov., Gavin Newsom is trying to bandage the AI job bleedout by mandating studies on subsidizing companies to keep employees rather than replace them with AI, I doubt that will do much to staunch the wound.
At the Open Source Summit North America, Linux Foundation CEO Jim Zemlin was optimistic about AI and jobs. He pointed out that, thanks to AI becoming “pretty damn good coders,” the number of open-source projects on GitHub has led to a “surge of new code and projects.”
Zemlin also believes that while few developers will write code, “engineers will still design, review, secure, and integrate that code.” (He’s referring to what’s becoming known as forward-deployed engineers.) This, in turn, will supposedly lead to tech job growth.
I’d feel a lot better about that prediction if I believed the C-suite suits at most companies were capable of truly forward-looking thinking rather than focusing entirely on hiking the stock price by making the next quarter look good through staffing cuts.
In the long run, sure, AI will make us more productive. But, we’re not there yet. For now, companies need to keep employees happy, not shove AI down their throats — and work out carefully and thoughtfully how AI will really work for business.
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