End of Zero Interest + AI Saving Potential = Layoffs

Question

This is conjecture/a hypothetical

This article gave me pause 
https://newsletter.pragmaticengineer.com/p/zirp-software-engineers

... when considering that interest rates have risen and servicing long term bonds/debts have to be paid for after a decade of cheep money.

And now contrast this with a pure economic equation/exchange of value and accounting of savings by AI.

It may cost a company for a Developer $1200 for each 500 lines of code.

Where as an AI (though this is a hypothesis) can write 500 lines of code for 1/1000th of the cost of a human developer (based on X rate per token, and a simple sum calculation).

So, there is a shadow of AI underlying these layoffs when contrasted against 10+ years of cheap money, servicing of debts and the potential savings on labour that small to at scale of AI &amp; automation brings to reducing labour costs.

These opinions are my own, it is a thinking exercise, and just me connecting the dots, between two different points of view and unrelated sources of news/knowledge.

See Video:

Source: 
CS50 (Harvard) - YouTube - End of Programming 
Matt Welsh is Co-founder and Chief Architect of Fixie.ai, a Seattle-based startup developing a new computational platform with AI at the core. He was previously head of engineering at OctoML, a software engineer at Apple and Xnor.ai, engineering director at Google, and a Professor of Computer Science at Harvard University. He holds a PhD from UC Berkeley.
https://youtu.be/JhCl-GeT4jw?si=0oQ9fZlhrS4lzp_G

madscience · Accepted Answer

Disclaimer: I haven't read the article yet or watched the youtube video, but in my opinion, "AI investment" is just a scapegoat of an excuse for all the layoffs. At the end of the day, it comes down to earnings and a company's ability to make shareholders money and layoffs are the fastest way to do that right now and "reinvesting in AI" is just corporate speak to make it sound like they know what they're doing.

My inclination is that companies are comparing like you are with the "Price per lines of code" mentality, but what they aren't realizing is that using AI to help developers will be significantly more useful than using AI to replace devs

eightysixer · Answer

Research finds downward pressure on code quality due to coding AI: https://visualstudiomagazine.com/articles/2024/01/25/copilot-research.aspx

I think any CEO doing layoffs thinking that SWEs will be more productive with AI is:

1) fundamentally misunderstanding how much judgement is required to build good software

2) if not actually instructing the CTO, engineering VPs, etc. to make this a part of the company's technical strategy, then it's just a bunch of hopes and dreams

For a lot of consumer grade software, the hit to quality might be acceptable. It's trying to find the answer to "how cheaply can we make our products without tanking the share price?" I understand the impulse now that capital costs something, but some companies (Boeing is one example) will take this too far.

I think the industry is overcorrecting. I'll admit that might be motivated reasoning; if AI really is tranformational and not just another bubble then a lot more of us might be looking at permanent career change. If I'm right, things will be better in a couple years.

whoshowwhat · Answer

Yes, there will be a hype cycle of enthusiasm, revolution and drop in expectations v experiences, and the plateauing oh norming into the new normal.And even low quality code that costs lives (AI glitches in  cars, and other every days service) etc. This leads In to the risk of AI driven systems. or AI generated code components ...So, agree, this hypothetical may be part of the current hyperbole. As Matt Welsh states in his video, most tech progress has been evoluntary, this AI leap and bound progress was a jump start revolution. What happens next is correcting code quality v human supervision, and new fangled code testing/review is be seen/emerging.Have a good watch if the video. Notably, it comes from Harvard CS teaching the next gen of Devs/techs.

19g6ul0gxi7vi · Answer

A decade of zero interest rates? What? That was only like a year from covid

whoshowwhat · Answer

This is a hypothetical, not covering all the upsides, trade offs, and transferable benefits.Compare the cost savings of the horse and cart transport logistics with the advent of the car/petrol engine... To this transition. At the time, progress would have seen efficiencies with a single mechanic per mechanical transport; and then the shift/revolution in transit/logistics.

End of Zero Interest + AI Saving Potential = Layoffs

The end of 0% interest rates: what the new normal means for software engineers

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