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Meta CEO Mark Zuckerberg has steered the company through a “year of efficiency” that brought massive layoffs and record profits. Alex Wong—Getty Images
Many large technology companies are slimming down or cutting staff. This corporate fat reduction has become common in the tech sector over the past few years.
Renowned marketing professor and media mogul Scott Galloway argues that AI is behind the layoffs. The problem is that many executives are reluctant to admit that they are firing employees with the intention of replacing their jobs with artificial intelligence.
Galloway likens the move to an open secret that many people use to help themselves lose weight, calling AI the “corporate Ozempic.”
“My theory is that companies (particularly technology companies) have also discovered weight loss drugs, but are shying away from them,” Galloway wrote on his blog, No Mercy/No Malice. “Two of his articles have been featured in recent financial news: layoffs and record profits. They are related.”
Technology companies have cut jobs one after another in recent months. Meta, a leading Silicon Valley company, has laid off approximately 20,000 employees since November 2022. Apple could cut hundreds of employees from its self-driving car division after canceling the project. Salesforce laid off about 700 employees at the beginning of the year, after cutting more than 7,000 jobs in 2023. In January, Alphabet laid off more than 1,000 employees after handing out 12,000 pink slips in a pair of layoffs that hit its ad sales and hardware teams. In 2022.
Galloway points out that all of this has been possible because of the technology industry’s stellar performance. Some announced historic numbers, including Meta, which reported a record $40.1 billion in sales for the fourth quarter of 2023, and tripled its net profit compared to the same period last year. Galloway said the discrepancy points to a shift in strategy rather than a need to right-size distressed companies.
“I believe AI is playing a bigger role in workforce reductions than CEOs are willing to admit,” Galloway wrote in the post. “CEOs are reluctant to talk about this, at least publicly, because they’re afraid of the brave new world of AI.”
Galloway declined to comment.
So far, the tech company has not said the layoffs are a result of the shift to AI. In fact, people like IBM CEO Arvind Krishna say the company’s investments in AI will mean an increase in its workforce. Companies like Alphabet, which became a powerhouse in the AI space by acquiring pioneering startup DeepMind in 2014 and releasing tools like its Bard chatbot (now called Gemini), He made it clear that the firing was unrelated.
“We’re not restructuring because AI is taking over roles, and that’s the important thing here,” Alphabet Chief Business Officer Philip Schindler said on an earnings call this month.
That denial “first got my antennae up,” Galloway says. Extending Ozempic’s analogy, he compares these corporate statements to people who say they’ll “cut out gluten” to lose weight, instead of admitting they’ve started taking weight loss drugs. Ozempic basically eliminates appetite, making it easier to lose weight. In business, AI can remove desire, and Galloway believes companies will be happy to do so.
“If consumers are willing to pay $1,000 a month to lose weight while suppressing their appetite, companies can achieve the previously unthinkable goal of cutting costs while increasing profits. How much would you pay to do that?” Galloway writes.
That doesn’t mean all jobs will disappear. Galloway believes AI will also help employees do their jobs better, allowing companies to do more with less. “Managers can take on new initiatives and areas without the headache of hiring more people,” he writes.
The concept of a future workplace where AI and humans work in harmony is becoming increasingly popular. One of the more accepted views today is that AI simply replaces mechanical, repetitive tasks. In that scenario, AI could replace specific job duties, if not entire roles. That doesn’t mean the impact of AI is negligible. The International Monetary Fund predicts that approximately 60% of jobs in developed countries will be affected by AI. However, about half of them are likely to be more productive. Another estimate from Goldman Sachs suggests that two-thirds of jobs, and up to a quarter of current jobs, could be affected.
A new focus on AI means there will be an increased demand for a small pool of talent with expertise in this field. Companies will be eager to hire these people, and many tech companies already are, but the trend is starting to spread to other areas of corporate America as well.
Galloway predicts that over the next year, as the use of AI in the workplace becomes more commonplace, executives will be open about the fact that they are replacing humans with AI. When that happens, “the pundits will be clutching their pearls for a heated minute until the stock explodes and the secrets hidden in plain sight will be revealed for all to see.” [AI is] Corporate Ozempic. It’s not that we have less bread, it’s that our desire for bread decreases. Read: Hiring people,” Galloway wrote.
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