Both Meta & Microsoft have said they're shedding staff explicitly to free up cash flow to invest in AI;
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Both Meta & Microsoft have said they're shedding staff explicitly to free up cash flow to invest in AI;
on one level this is unemployment linked to technology, but its a bit different from *actual* technological unemployment - the latter sees people losing jobs due to the deployment of technology to do their jobs. Microsoft & Meta on the other hand are sacking people to take a (bigger) punt on a business strategy that is yet to prove its transformation of productivity.
@ChrisMayLA6 By shedding workforce, they say they are going to invest into "AI" initiatives, but in the end that cash could also be more easily redirected/hoarded/frozen in order to survive the bubble popping. Could they be preparing in advance for a crash? I wonder if this isn't another sign of the impending bubble collapse.
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Both Meta & Microsoft have said they're shedding staff explicitly to free up cash flow to invest in AI;
on one level this is unemployment linked to technology, but its a bit different from *actual* technological unemployment - the latter sees people losing jobs due to the deployment of technology to do their jobs. Microsoft & Meta on the other hand are sacking people to take a (bigger) punt on a business strategy that is yet to prove its transformation of productivity.
I was at Microsoft when the pandemic hit. Amy Hood told all of the employees that they were not going to rush into hiring (unlike many competitors) because they wanted sustainable growth. Hiring people to deal with a spike in demand and then firing them when the spike subsides would be bad for everyone, she said.
Since then, Microsoft has got rid of about 20% of the workforce. That counts only people in the big redundancy rounds. A lot of people I respected left voluntarily and they ended the policy that orgs reclaim headcount when people leave and so can hire replacements: if someone left, you needed to explicitly request new headcount from your management to get a replacement. A lot of the folks who left had their role filled by promoting someone else, who was then not replaced.
The culture of lying to management means that the senior leadership has no idea how under resourced most of the critical revenue-generating business units are. Anyone who tells them anything other than ‘everything is great, I bet we don’t even need all of the people we have!’ gets a reduced bonus and learns not to do it again.
The company reminded me of a dead oak tree. It looks strong from the outside but a single storm could knock the whole thing down.
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Productivity calculated as were reducing our forces because the productivity technology is costing nine or 12 times as much as we get in revenue.
Truly revolution, where the laws of physics no longer applied to business in any way shape or form. Maybe productivity was assigned integer and they just rolled over max positive value or something.
@GhostOnTheHalfShell @ChrisMayLA6 @HarriettMB
AI is a fascist loss leader.
Like cheap chicken at a grocery store, it brings in the rubes & achieves other aims, like subscribers.
https://www.inc.com/bill-murphy-jr/how-costco-turns-loss-leaders-into-an-art-form-and-why-your-business-might-want-to-copy-them/91270572https://www.businessinsider.com/sam-altman-ai-utility-electricity-water-openai-2026-3
It's achieving other oligarchic goals.
Just as Koch kept awful rideshare companies like Uber & Lyfft afloat for years, to torpedo public transit projects.
https://jacobin.com/2019/08/uber-koch-brothers-david-charles-rideshare-public-transithttps://jacobin.com/2022/07/uber-files-leak-global-war-workers-lobbying
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Why are governments embracing AI?
Because they value corporate profits over the wellbeing of their citizenry (IMO). They fear a massive financial drain if they aren't competitive with the US in encouraging AI replacement of human workers.
Also, they fear even greater dependence on US-based technology dependence.
But what will society be with mass unemployment and hallucinating machines making most decisions?
I suspect that there's a lot of political and financial pressure to adopt US corporate technology generally and AI is a big part of that because of the huge investments.
It's a big gamble.
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I was at Microsoft when the pandemic hit. Amy Hood told all of the employees that they were not going to rush into hiring (unlike many competitors) because they wanted sustainable growth. Hiring people to deal with a spike in demand and then firing them when the spike subsides would be bad for everyone, she said.
Since then, Microsoft has got rid of about 20% of the workforce. That counts only people in the big redundancy rounds. A lot of people I respected left voluntarily and they ended the policy that orgs reclaim headcount when people leave and so can hire replacements: if someone left, you needed to explicitly request new headcount from your management to get a replacement. A lot of the folks who left had their role filled by promoting someone else, who was then not replaced.
The culture of lying to management means that the senior leadership has no idea how under resourced most of the critical revenue-generating business units are. Anyone who tells them anything other than ‘everything is great, I bet we don’t even need all of the people we have!’ gets a reduced bonus and learns not to do it again.
The company reminded me of a dead oak tree. It looks strong from the outside but a single storm could knock the whole thing down.
We must all use LINUX then!
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@GhostOnTheHalfShell @ChrisMayLA6 @HarriettMB
AI is a fascist loss leader.
Like cheap chicken at a grocery store, it brings in the rubes & achieves other aims, like subscribers.
https://www.inc.com/bill-murphy-jr/how-costco-turns-loss-leaders-into-an-art-form-and-why-your-business-might-want-to-copy-them/91270572https://www.businessinsider.com/sam-altman-ai-utility-electricity-water-openai-2026-3
It's achieving other oligarchic goals.
Just as Koch kept awful rideshare companies like Uber & Lyfft afloat for years, to torpedo public transit projects.
https://jacobin.com/2019/08/uber-koch-brothers-david-charles-rideshare-public-transithttps://jacobin.com/2022/07/uber-files-leak-global-war-workers-lobbying
1/
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1. It's money laundering for petrostate despots & other oligarchs.
https://www.bloomberg.com/news/articles/2024-11-06/saudis-plan-100-billion-ai-powerhouse-to-rival-uae-s-tech-hubSimilar to how Russia looted its national treasury & used Trump & Deutsche Bank to launder it via real estate.
Citizens go homeless in overpriced housing markets, so billionaire private equity can launder their loot in residential real estate.
Zuckerberg blew $77 billion on the Metaverse to launder cash & so still kept his job.
2. AI is fascist international state surveillance & is wasting energy
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1. It's money laundering for petrostate despots & other oligarchs.
https://www.bloomberg.com/news/articles/2024-11-06/saudis-plan-100-billion-ai-powerhouse-to-rival-uae-s-tech-hubSimilar to how Russia looted its national treasury & used Trump & Deutsche Bank to launder it via real estate.
Citizens go homeless in overpriced housing markets, so billionaire private equity can launder their loot in residential real estate.
Zuckerberg blew $77 billion on the Metaverse to launder cash & so still kept his job.
2. AI is fascist international state surveillance & is wasting energy
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Microsoft and Google may have to surrender people's data to Saudi Arabia after signing huge deals there
Saudi Arabia is seeking to be an innovation hub, but activists are warning that tech firms could be complicit in the repression of dissidents.
Business Insider (www.businessinsider.com)
https://www.wired.com/story/power-bills-in-the-us-are-soaring-and-will-rise-further-still/
Trump and the Energy Industry Are Eager to Power AI With Fossil Fuels
At a Pittsburgh summit, the Trump administration, energy executives, and tech barons joined as one to promote AI as the future of fossil fuels.
WIRED (www.wired.com)
3. AI is going to be the next Russian Internet Research Agency for election meddling & hack-for-hire disinformation.
Five Billionaires Pledged $1 Billion To Boost Economic Mobility Using AI
Five of America’s top philanthropists are teaming up for a new venture aimed at helping low-income Americans rise from poverty. An AI giant has signed on to help.
Forbes (www.forbes.com)
These folks have never given two hoots for worker's "economic mobility". NextLadder is forced user adoption & malign influence.
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I suspect that there's a lot of political and financial pressure to adopt US corporate technology generally and AI is a big part of that because of the huge investments.
It's a big gamble.
@ReggieHere @HarriettMB @ChrisMayLA6
Correct. Corey Doctorow has written about the decades of US trade policy that pushes US tech dominance.
But Trump has made it clear to every nation that relying on America (for anything) is doomed to fail.
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Microsoft and Google may have to surrender people's data to Saudi Arabia after signing huge deals there
Saudi Arabia is seeking to be an innovation hub, but activists are warning that tech firms could be complicit in the repression of dissidents.
Business Insider (www.businessinsider.com)
https://www.wired.com/story/power-bills-in-the-us-are-soaring-and-will-rise-further-still/
Trump and the Energy Industry Are Eager to Power AI With Fossil Fuels
At a Pittsburgh summit, the Trump administration, energy executives, and tech barons joined as one to promote AI as the future of fossil fuels.
WIRED (www.wired.com)
3. AI is going to be the next Russian Internet Research Agency for election meddling & hack-for-hire disinformation.
Five Billionaires Pledged $1 Billion To Boost Economic Mobility Using AI
Five of America’s top philanthropists are teaming up for a new venture aimed at helping low-income Americans rise from poverty. An AI giant has signed on to help.
Forbes (www.forbes.com)
These folks have never given two hoots for worker's "economic mobility". NextLadder is forced user adoption & malign influence.
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https://fortune.com/2026/04/23/nursing-gig-economy-minimum-wage-ai-surveillance/
4. It'll be used to suppress wages using the same algorithms that Harlan Crow used in RealPage to blow up rents internationally.
It'll be used to balloon utility rates & grocery prices.
https://www.pbs.org/newshour/economy/personalized-pricing-has-spread-across-many-industries-heres-how-consumers-can-avoid-ithttps://www.bloomberg.com/graphics/2025-ai-data-centers-electricity-prices/
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I was at Microsoft when the pandemic hit. Amy Hood told all of the employees that they were not going to rush into hiring (unlike many competitors) because they wanted sustainable growth. Hiring people to deal with a spike in demand and then firing them when the spike subsides would be bad for everyone, she said.
Since then, Microsoft has got rid of about 20% of the workforce. That counts only people in the big redundancy rounds. A lot of people I respected left voluntarily and they ended the policy that orgs reclaim headcount when people leave and so can hire replacements: if someone left, you needed to explicitly request new headcount from your management to get a replacement. A lot of the folks who left had their role filled by promoting someone else, who was then not replaced.
The culture of lying to management means that the senior leadership has no idea how under resourced most of the critical revenue-generating business units are. Anyone who tells them anything other than ‘everything is great, I bet we don’t even need all of the people we have!’ gets a reduced bonus and learns not to do it again.
The company reminded me of a dead oak tree. It looks strong from the outside but a single storm could knock the whole thing down.
@david_chisnall @ChrisMayLA6 A pet hate is where expert gamers or game developers determining the user experience of games they develop. The 'Easy' level to them is often tortuously hard for me.
They should have a set of testers who represent the public better. Then watch them behind one way mirrors ...
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Both Meta & Microsoft have said they're shedding staff explicitly to free up cash flow to invest in AI;
on one level this is unemployment linked to technology, but its a bit different from *actual* technological unemployment - the latter sees people losing jobs due to the deployment of technology to do their jobs. Microsoft & Meta on the other hand are sacking people to take a (bigger) punt on a business strategy that is yet to prove its transformation of productivity.
@ChrisMayLA6 they've chosen DC CAPEX over employees. Which is a reminder to all use software devs: we're just rows marked R&D and Support in the spreadsheet
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Both Meta & Microsoft have said they're shedding staff explicitly to free up cash flow to invest in AI;
on one level this is unemployment linked to technology, but its a bit different from *actual* technological unemployment - the latter sees people losing jobs due to the deployment of technology to do their jobs. Microsoft & Meta on the other hand are sacking people to take a (bigger) punt on a business strategy that is yet to prove its transformation of productivity.
@ChrisMayLA6 "One of these things is not like the other"
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@ChrisMayLA6 the problem is. They have nothing else to induce growth. So they throw money on a bet and hope it will work.
@prefec2 If there are no longer any users willing to use those substandard products, the system will shut down immediately.
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@ReggieHere @HarriettMB @ChrisMayLA6
Correct. Corey Doctorow has written about the decades of US trade policy that pushes US tech dominance.
But Trump has made it clear to every nation that relying on America (for anything) is doomed to fail.
@TCatInReality @ReggieHere @ChrisMayLA6 Today there’s a headline that #Trump is threatening tarriffs on the #UK if they don’t drop the digital services tax; a couple of days ago he was claiming the relationship between the UK & #USA would be repaired because he likes the King. Typical Trump. He gets what he wants [Royal visit] but will continue to bully, demean and dominate the subject of his ire. There’s no pleasing this
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@TCatInReality @ReggieHere @ChrisMayLA6 Today there’s a headline that #Trump is threatening tarriffs on the #UK if they don’t drop the digital services tax; a couple of days ago he was claiming the relationship between the UK & #USA would be repaired because he likes the King. Typical Trump. He gets what he wants [Royal visit] but will continue to bully, demean and dominate the subject of his ire. There’s no pleasing this
Yes. I've mentioned this before, but US foreign policy is heavily biased towards US big tech and cross-border data transfers to the degree that it's becoming a geopolitical tool akin to hosting US military bases.
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@TCatInReality @ReggieHere @ChrisMayLA6 Today there’s a headline that #Trump is threatening tarriffs on the #UK if they don’t drop the digital services tax; a couple of days ago he was claiming the relationship between the UK & #USA would be repaired because he likes the King. Typical Trump. He gets what he wants [Royal visit] but will continue to bully, demean and dominate the subject of his ire. There’s no pleasing this
@HarriettMB @TCatInReality @ReggieHere @ChrisMayLA6 Let him tariff away. Americans for the bill. He's digging his own grave. He's impenetrably stupid.
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Yes. I've mentioned this before, but US foreign policy is heavily biased towards US big tech and cross-border data transfers to the degree that it's becoming a geopolitical tool akin to hosting US military bases.
@ReggieHere @TCatInReality @ChrisMayLA6 I’d like to see them out of every country as well, especially all of the EU and UK.
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@ChrisMayLA6 So humans are progressively shut out of economic as well as semantic loops, the algorithms talk to and copy each other... A weaving machine so perfect it no longer needs thread, nor makes cloth? https://thesinisterscience.wordpress.com/2021/01/11/frederik-pohls-mass-consumer-1-the-midas-plague/
@SusiArnott @ChrisMayLA6
Whatever you think of Pohl’s story, “The Midas Plague” seems an entirely apt description of the late stage capitalism we are currently suffering. Its greed will destroy everything, just as King Midas’s did.
#enshittification -
FOMO.
There's an element of FOMO. Microsoft was late with a mobile platform that worked nicely on capacitive touchscreens and, as a result, lost that market entirely. Though it turns out that wasn't a bad thing: they can sell Office on both iOS and Android and no one is actually making money from mobile operating systems (they are on the surrounding ecosystem, but the OS is the loss-making part that enables that and being a player in the ecosystem without paying that cost is often better).
But there's a much bigger part of a need to grow.
It's easy to grow when a product is useful and new. The IBM PC wasn't the first personal computer to be powerful enough to be useful, but it was around that time. When I was a small child, in a middle-class area, almost no one I knew owned a computer. My school had a few (less than one per 20 pupils). Going from there to Gates' goal of a computer on every desk allowed them to double sales for many years.
Then the Internet came along. Gates said it was a passing fad and things like MSN (at the time, an OSP, not a web site) would replace it. But it then caused another decade of growth as every business went from needing a computer to needing a web presence. MS didn't get the lion's share of this, but still had a load of products (especially acquisitions like Hotmail) that grew along with this expansion.
Then came two things at about the same time. One was a bunch of technologies (capacitive touchscreens, 3G mobile networks, better LiIon batteries, power-efficient ARM SoCs), which made mobile phones feasible. Going from a computer in every desk to a computer in every pocket allowed a load more doublings. Microsoft again didn't get the biggest part of this growth, but they rode that wave.
The other thing that happened was that virtualisation on x86 became feasible. Xen showed that computers were fast enough for paravirtualisation to give you multiple useful virtual machines on a single computer, Intel and AMD responded with extensions to allow unmodified operating systems to run. This provided a path to consolidation in what became the cloud. Rather than buying a computer, you could rent a fraction of a computer, which would be cheaper since you didn't actually need 100% of a computer 100% of the time. Even if the provider charged you a 100% markup, you were probably using only 20% of a computer so paying for 40% of one was cheaper than buying a whole one. Especially if you were actually using 80-100% of a computer but only 20-25% of the time (e.g. during peak business hours).
Nadella was the lead in the cloud division when it went from being a weird thing to being one of the major revenue sources for the company.
But the cloud has a problem. People's requirements for cloud storage and compute grow organically. You might need 20% more cloud stuff this year than you did last year. At the same time, the cost of compute and storage is dropping. Here's a fun graph of storage costs. From 2013 to 2018 (ignore the numbers after that, they're predictions and are nonsense), the cost of 1TB of SSD storage went from $694 to $107. To remain competitive, cloud prices needed to come down at the same rate. They didn't, so they're relying more on lock-in, but that doesn't get you new customers.
Most of the growth in the cloud was not new compute demand, it was people moving things from on-premises deployments to the cloud. That's a finite (and nearly exhausted) market. That, combined with the need to lower prices over time to prevent companies moving back, is a problem. It's made worse by the fact that the biggest customer see the least benefit. If you're a large company with your own server rooms full of machines, the cost reductions of the cloud are negligible. If you're a small company with one server, moving to a cheaper system with built-in redundancy is a win. But getting each of those companies to move costs a lot.
The cloud really needs a use case that has growing compute requirements. The push for 'big data' was starting to run up against both regulatory issues (GDPR was making data a liability, not an asset) and security problems (you get very bad press when you leak customer data that you have no real reason for holding). AI came along with a promise that customers would keep needing more and faster compute every year. The thing that the leadership at these companies missed is that, for this to make business sense, they also need to be willing to pay an increasing amount each year. And that means you need to deliver increasing productivity improvements each year.
Delivering zero productivity increases while having to put up prices to customers is how we see the bubble start to burst.
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@ReggieHere @TCatInReality @ChrisMayLA6 I’d like to see them out of every country as well, especially all of the EU and UK.
@HarriettMB @ReggieHere @TCatInReality @ChrisMayLA6
Back in the last millennium, when graffiti was the social media, I recall seeing a graffito that said:
"US out of North America"
