So the whole of the interwebs is aflame with “doomerism” and posts about how we will all be on UBI within 24 months.
Jack Dorsey, the founder of Twitter, recently posted about laying off 40% of his staff. Block was reducing its organisation from over 10,000 people to just under 6,000.
We should take AI’s impact seriously, but we should also be honest about incentives. In 2026, “AI” is becoming the most convenient explanation for layoffs because it signals efficiency, future-readiness, and decisive leadership. Markets often reward that story.
The harder truth is that a lot of companies are also unwinding years of bloat: overhiring cycles, excessive spend, and projects that never found product-market fit. AI may accelerate the ability to run lean, but it’s not the only driver. In plenty of cases, it’s not even the primary one.
I think it’s important that we look closely at what’s really happening. These days, more than ever, it’s best not to accept things at face value. I, for one, have historically fallen victim to thinking that technological developments are significantly ahead of where they are in reality.
For example, I was wrong about
AR: In particular, Google Glass. When it originally launched, I was convinced this tech was going to be more disruptive.
Web3 gaming economies: I was convinced that some of these economies might have been more robust, and I believed that we would have a near-term future with multiple viable digital economies. Maybe one day. Sigh.
The numbers are real
I am certainly not saying there is no cause for concern. We are seeing significant layoffs at a large number of major companies.
The widely circulated lists include the US Government, UPS, Amazon, Intel, Citigroup, Nissan, Nestlé, Microsoft, Bosch, and others. Whatever the exact attribution between AI, restructuring, and market conditions, the headcount impact is real.
The hype
We are all reading the same posts where Dario Amodei is telling us that 50% of lawyers, consultants, and finance professionals will be “wiped out” within “12 months”.
It’s easy to get caught up in the hype. Personally, 12 months from now, I would be surprised to see this come to pass to such an extreme degree.
I am still sure it will have a huge impact, but maybe it’s not as bad as some are saying. Even Dario himself is actually saying that we are looking at a one-to-five-year timeline. Multiple venues on X are just sensationalising.
It’s really important to remember that this is straight out of the AI company growth playbook that Sam Altman used so well whilst growing OpenAI. Make people think that AI is something to be feared and that we need to be scared now. Oh, and by the way, feel free to invest in my Series A.
But what else could be at play here?
A scary pattern is emerging. Companies that conduct massive layoffs have the potential side effect of large stock gains.
The message to CEOs can start to look very simple: lay off 40% of your staff due to AI productivity gains and your stock jumps. Watch for a cascade as more companies follow suit.
This in itself is quite worrying. It is then important to ask whether this sort of behaviour could become a smoke screen for other factors.
Even Sam Altman himself has highlighted what companies are starting to do: some companies are using “AI” as cover for plain old layoffs. They didn’t replace your job with an agent. They made bad bets, burned cash, and needed to cut headcount. Blaming AI just sounds better to investors than “we mismanaged the company”.
In tech, for decades, we have seen huge excess. Some of this excess can be identified from Jack Dorsey himself. If you are spending $68M on a single party, I mean...
On top of that, the headcounts of some of these companies have been huge for many years. Twitter had roughly 10,000 people before Elon Musk slashed headcount so aggressively.
It seemed to happen again at Block. In three years, from December 2019 to December 2022, Block more than tripled its headcount from 3,900 to 12,500. Unwinding less than half of an extraordinary COVID overhiring binge may have more to do with management and capital allocation than whether AI is going to take your job.
The founder’s choice
If you are a massive tech company that has been heavily overspending and maybe not generating enough revenue, founders now have a choice.
- You can announce that you overspent and overhired, and now need to cut headcount because you mismanaged things. This will obviously lead to bearish activity around your stock.
- You can announce that you are cutting headcount due to AI. You look smart, you see your stock rise, and your mismanagement is forgotten.
Conclusion
By no means am I suggesting that there is not legitimate cause for concern.
I have been using AI tools heavily since 2023. I have been working in the AI and crypto space for the last five years.
But after 15 years in tech as a whole, I have realised it’s really important not to get too caught up in hype. We need to ensure that we are looking deeply at the underlying incentives and motivations that are forging our future.
Despite everything, I am still extremely concerned about where AI is going. Unlike how I felt about Google Glass and Web3 gaming, where I hoped they would be huge, I am starting to hope that we are wrong about just how severe the impact of AI is going to be.
So the real question is: is it really the jobs apocalypse, or is it something else?