Tech giants' profits soar, but AI layoffs are becoming increasingly severe

AI is gradually swallowing a large number of white-collar jobs.

Microsoft has just released an impressive financial report, with net profit in the second quarter soaring 24% year-on-year and a market value surpassing $4 trillion. Logically, such a company should be hiring on a large scale and expanding its workforce, but the reality is that it is laying off employees. In a previous article by Wall Street Insight, Microsoft CEO Satya Nadella defended the layoff of 9,000 employees in an internal open letter to staff, stating that the company is more successful than ever, but some employees' skills have become outdated, and the company has chosen to hire fewer but more AI-strategy-aligned professionals.

Not only Microsoft, but also several large companies like Intel and British Telecom (BT) have announced plans to lay off thousands of employees directly related to AI.

Analysis indicates that more and more executives now view layoffs as a symbol of corporate progress. Achieving higher profits with fewer people has become the core strategic direction pursued by many companies. Businesses are preparing for a future where "the demand for manpower may be significantly reduced."

Is AI not replacing jobs, but making the jobs themselves disappear?

Although the AI era is giving rise to some new professions, a large number of positions will still be completely eliminated. Some companies have stated that the tasks previously handled by laid-off employees no longer exist.

For example, the demand for software developers has seen a dramatic decline. At the same time, examples of artificial intelligence shining in comparison to humans can be seen in the news headlines every day.

Additionally, a certain Big Four accounting firm recently used AI to automatically generate research reports, reducing the turnaround time for research work by 75%, saving 3,600 hours of analyst time.

This trend is particularly concerning for young workers. The CEO of recruitment company Hays stated that the rapid proliferation of AI may long suppress the recovery of entry-level white-collar positions.

For recent graduates, this is undoubtedly a huge shock; they find that the "entry ticket" has disappeared before they even have a chance to enter the job market.

Driven by AI, efficient operations with fewer people become the new paradigm for businesses

For the tech industry, "revenue generated per employee" has become a highly sought-after performance metric.

Y Combinator incubator now encourages entrepreneurs to build minimal teams—fewer people, automation, high profits.

There is also a website called "Tiny Teams Hall of Fame" that specifically lists companies that generate tens of millions or even hundreds of millions in revenue with very few employees.

OpenAI CEO Sam Altman boldly predicts that in the future, there will be "billion-dollar businesses that can be operated by one person."

This sounds like something out of a science fiction novel, but it is undeniable that large language models are profoundly reshaping the nature of white-collar work

Can Streamlined Management Truly Bring Long-term Resilience?

Although corporate management is keen on a "small and fast" organizational model, there are also viewpoints that raise doubts.

They argue that a more streamlined organizational structure does not necessarily create better companies, because while faster decision-making and lower management costs are certainly good, the cost is that core positions such as R&D, legal, and compliance may be weakened. With fewer employees, the organization's risk resistance capability may also decline; for instance, if issues arise such as AI model errors or regulatory compliance loopholes, it could trigger a chain crisis. The value of human attributes, such as creativity, emotional intelligence, and complex judgment, appears to be even scarcer in the AI era.

Some companies have tasted the bitter fruit of "fewer people may not be better." For example, Swedish payment giant Klarna, after significant layoffs and relying on AI to handle customer service, saw a continuous decline in customer satisfaction. Ultimately, the company decided to reverse course and rehire those customer service personnel who had been laid off.

Moreover, this transformation brings not only economic impacts but also profound cultural consequences. Some analyses suggest that if job positions are no longer abundant, will a university degree still retain its original value?