The AI Daily Brief: Artificial Intelligence News and Analysis - How AI Is Already Changing Jobs

Starting point is 00:00:00 Today on the AI Daily Brief, how AI is already changing jobs. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI. Thanks to today's sponsors, blitzy.com, for T-slabs and super-intelligent. And to get an ad-free version of the podcast, go to patreon.com slash AI Daily Brief. Hello, friends, one quick note. Today's episode once again got long. It is such a big topic how AI is changing jobs. But I know that I've now done a couple of these extended main episodes, no headlines,

Starting point is 00:00:35 kind of things this week. And there are a few things that I want to make sure that you guys hear about. So tomorrow, I promise we will be back with a normally formatted show. But for now, we're going to dive into how AI is already changing jobs. Welcome back to the AI Daily Brief. I'm fairly sure that when all is said and done, probably the number one topic on this show, in some ways, will have been the relationship between AI and jobs. There is perhaps no bigger impact in the short term, at least, that AI will have, then on reshaping the economy and the job market with it. This is an extremely fraught area. It's one where people who are concerned with AI are extremely vocal about their concern, and frankly, it's an area where even the accelerationists kind of lay off. I've spoken extensively

Starting point is 00:01:19 on this show about why I think that AI is really coming for all of our jobs, but that the net result of that won't be that none of us have jobs, but that pretty much all of our jobs will look different. I am, it will come as no surprise, extraordinarily optimistic about the long-term shape of work in the era of AI, but I am also not glib about the real disruption that's going to happen along the way. I don't think that these things are mutually exclusive, and I'd like to contribute to us having a more reasoned, nuanced conversation about all of this. Now, the specific context for today's discussion of this topic is one, a set of Microsoft layoffs, two, some news coming out of Klarna, and three, this interesting profile of Moderna merging two departments,

Starting point is 00:01:59 and four, some interesting findings from Lenny's newsletter and podcast about open AI roles. But let's start with the Microsoft side of things. The company recently announced around 3% of its workforce was being laid off, equivalent to 6,000 to 7,000 people, and many of these were extremely lucrative positions. Software engineering was one of the hardest hit areas. Of the roughly 2,000 positions that were cut in Microsoft's home state of Washington, 40% of those were software engineers. The rest of the categories were pretty much all management, About 20% were project managers, technical program managers, business program managers, and customer experience program managers all got hit as well. The information summed it up as Microsoft targeting

Starting point is 00:02:39 middle management. Importantly, a company spokesperson said that the layoffs are not related to performance. Instead, they are meant to reduce the number of managers and, quote, best position the company for success in a dynamic marketplace. Greg Eisenberg summed up what a lot of people were thinking when he tweeted, Microsoft just terminated 7,000 employees effective immediately because AI can now do their jobs. Official reason, organizational changes to best position the company. Translation, AI just boosted productivity enough to replace thousands of roles overnight. Now, there are three potential explanations for this. One is that every company is thinking a little bit differently right now about economic instability and resilience. I think it would be probably overstating it to argue that

Starting point is 00:03:22 these were tariff-related job cuts, but there is absolutely and undeniably, a sense that the economy is more unpredictable than it was just a few months ago, and more unpredictability tends to lead companies to look for ways to have more flexibility, which often means trying to reduce costs. There's also the longer-term phenomenon that big tech just hasn't been hiring. In fact, they've been shrinking. And to some extent, one could say that this is a return back to the mean after the very heady hiring years of the 2020-2020-2020-COVID era. Another explanation, maybe the most basic, is that Microsoft could actually just think that they have too many managers. They might have decided that they made a mistake in how they've structured things.

Starting point is 00:03:59 For anyone who has worked inside or with a big company, I don't think it'll take a huge leap of imagination to believe that that might be the case. But of course, it's hard for many not to think that AI has to be at least part of the culprit here. Especially given that recently we've heard that AI has written up to 30% of the code at Microsoft. The fact that software engineering was the hardest hit, at least in the Washington State cuts, does make one wonder if these things are related. Now, there has been a lot of chatter recently about AI and its likely impact on jobs. In fact, there has been a growing chorus of leaders who are changing their internal policies

Starting point is 00:04:33 because of AI. This started back in April when the CEO of Shopify had a memo leaked, where he discussed extensively his thoughts on how AI was going to change their business, but where the most notable part, at least from a media standpoint, was the fact that basically before requesting new headcount, teams had to prove that they had tried to do whatever needed to be done with AI and just determined that they couldn't. Not job cuts, but instead sort of a soft hiring freeze, saying use AI instead. That was followed up at the end of April, with Duolingo announcing something similar, although in this case there were actual changes. In announcing that the company was going

Starting point is 00:05:08 to be AI first, part of that was starting to replace contract workers with AI for content generation. One of the important things from CEO Luis von On's memo about this is that it very clearly show that we are shifting away from AI being thought of exclusively as a productivity technology into something that's going to more fundamentally shake up how business is designed. A notable paragraph reads, AI isn't just a productivity boost. It helps us get closer to our mission. To teach well, we need to create a massive amount of content and doing that manually doesn't scale. One of the best decisions we made recently was replacing a slow manual content creation process with one powered by AI. Without AI, it would take us decades to scale our content to more learners.

Starting point is 00:05:47 We owe it to our learners to get them this content ASAP. Being AI first means we need to rethink much of how we work. Making minor tweaks to systems designed for humans won't get us there. The CEO of Fiverr took it even farther, with Mikhail Koffman saying that AI is definitely coming for their jobs, including his. Miko wrote, It does not matter if you're a programmer, designer, product manager, data scientist, lawyer, customer support rep, salesperson, or a finance person.

Starting point is 00:06:12 AI is coming for you. Now, interestingly, his note did not like a person. duolingoes include any sort of new policy announcements, it was an attempt to recalibrate people before it came to that. This is all given the market and society a lot to digest, and as you might imagine, the response hasn't been universally positive. For as much as some people are lauding these CEOs for saying, out loud, what many are thinking behind closed doors, many users of and subscribers of their services don't like this shift to AI and are voting with their feet and their dollars, which is, by the way, a totally appropriate and market-aligned way to send signals.

Starting point is 00:06:47 interestingly, one of the companies that was earliest on this trend was Klarna. Years ago, even as Gen AI was just getting up and running, Klarna was talking very extensively about how it was replacing big sets of its customer service agents with AI and how it was even rebuilding SaaS software from the ground up for its particular needs. Recently, some news came out, however, that seemed at first glance at least to some to contradict Klarna's narrative. Fast Company wrote a piece called Going AI First appears to be backfiring on Klarna in Duolingo. Klarna is hiring again after replacing employees with AI. Meanwhile, Duolingo is facing blowback on social media.

Starting point is 00:07:22 Now, I already talked about the Duolingo part, but when it comes to the Klarna part, recently CEO Sebastian Simmikowski, said that they were actually slowing AI-driven job cuts and hiring more people again. Bloomberg reports, Clarnagroup's CEO says his pursuit of cost-cutting and customer service, fueled by advancements in AI, has gone too far. To that end, he's plotting a rare recruitment drive so the buy-now pay-later company's customers will always have the option of speaking to a real person. The firm is piloting a new cohort of employees in a, quote, Uber type of setup, where they can log in and work remotely with a view to eventually replacing a few thousand human agents that Klarna currently outsources. The pilot has started small with two of the new breed of customer service agents live now,

Starting point is 00:08:00 but the ambition is to tap into candidates such as students or rural populations. Simmitkowski said, from a brand perspective, a company perspective, I think it's just so critical that you are clear to your customer that there will always be a human if you want. Today's episode is brought to you by Blitzy, the Enterprise Autonomous Software Development Platform with Infinite Code Context, which, if you don't know exactly what that means yet, do not worry we're going to explain, and it's awesome. So Blitzy is used alongside your favorite coding copilot as your batch software development

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Starting point is 00:11:54 agent at besuper.aI, and let's get you plugged into the agentic era. Now some people, even tech adjacent folks, jumped all over this. Previous Spacklord and All In podcast member Chmoth Palahapitia wrote, not nearly enough people are talking about the implications of Klarna rolling back some of their AI bets. Not knowing any of the details, I can guess why. Replacing determinism or humans with probabilistic code is fraught with edge cases and requires new ways of software development and process engineering that aren't well solved yet. The implication to an entire generation of AI apps will be severe, as more companies come to terms with the difficulty in getting products to

Starting point is 00:12:27 work reliably in production with AI in the loop. Customer service may be the first funeral signpost. The result will be that many startups will need to simply use AI for narrow use cases and then otherwise acted terministically. So what if people funded then? An AI company? Not really. Just a really overpriced SaaS company at AI valuations. Now, if you're thinking to yourself,

Starting point is 00:12:46 boy, that's a lot of presumption for clearly saying that you don't know what's actually going on, you're not alone in that feeling. What's more? Sebastian jumped in to say that that's not exactly what's going on here. He responded, we did not really decide to roll it back. We're actually accelerating it.

Starting point is 00:13:02 Bloomberg focused on one part and the rest of old media picked it up and twisted it a lot. Happy to share with you what actually happened and is happening. So here's what I read when I saw that post. What I read was that a CEO who had wanted to be on the forefront of trying out AI was calibrating based on what the market actually wanted, which, as it turned out, was the option of people. One of the things that I think gets radically underappreciated and underdust when we talk about these sort of shifts is that organizations finding new efficiencies and saving money in a new way of doing things, does not a priori mean that they will not reinvest that money

Starting point is 00:13:40 in other human areas. Specifically, the fact that AI agents can do a huge part of customer service extremely well. Does not a priori mean that companies are all going to just pocket the savings from cheaper customer service and go on their merry way. Instead, what I anticipate happening will be that many companies will decide to invest in a comprehensive customer service system that includes at the top end some of the best trained, best prepared, most empathetic, most adept problem-solving customer service agents you've ever seen in your life. A thing that was once whatever could become a prestige position. And indeed, CEO Sebastian took to Twitter yesterday to clarify all this.

Starting point is 00:14:22 He said, I really try to be balanced and consistent. It's just two things can be true at the same time. We drive huge efficiencies helped by AI, and that continues. news, and we realize in an AI world, the human customer connection and support will be valued even higher and we must offer it. Media does not deal well with two messages at the same time, though. Now, holding aside the all too easy critiques of media, this notion that AI is going to increase the premium on human talent has implications that I think extend way beyond just customer service. I recently wrote this post and did the companion podcast about how AI will change consulting

Starting point is 00:14:57 and professional services, and a big part of it came down to, in a world where, all the skills are commoditized and all the knowledge is accessible to everyone, people are going to work with other people they like, what we previously might have derogatorily considered soft skills, things like communication, empathy, creativity, taste, whatever, are going to become the most valuable skills. The things that make us humans rather than machines become even more valuable when machines are doing all the stuff that we used to do. And so if the answer isn't just things going away, but things changing, are there areas where we might start to see or get a glimpse of what that change is going to look like. And that's why I was really interested to see

Starting point is 00:15:35 this article from the Wall Street Journal called Why Moderna merged its tech and HR departments. Now, this is really interesting. Invidio, Jensen Huang, said in an interview, or a speech rather, a couple months ago, that IT was going to be the HR department in the age of agents. And we all kind of laughed, while also pondering, and certainly inside superintelligent, we've actually seen how confusing this can be. People aren't exactly sure where to locate these issues, and the HR question is a real one because are agents closer to an IT function or are they closer to a human resource function? So what's interesting about Moderna is that they are basically explicitly combining these areas in order to figure it out. You don't get the impression reading this article

Starting point is 00:16:17 that they are totally sure and confident around how this is going to play out. They just know that each of these stakeholders tech on the one side, HR and the other, need to have a seat at the table as new digital employees get brought in and integrated into the workforce. So while the experiment is early, this is a place that I would look to start getting a sense of how this might play out. We've also had some interesting recent commentary around what work is going to look like in this new agentic era. Here's Jack Clark, one of the co-founders of Anthropic,

Starting point is 00:16:45 talking about how AI will be the era of the manager nerd. I think it's actually going to be the era of the manager nerds now, where I think being able to manage fleets of AI agents and orchestrate them is going to make people incredibly powerful. And I think we already see this today with startups that are emerging but have very small numbers of employees relative to what they used to have because they have lots of coding agents. Like mid-jurney, right? Yeah. Yeah. Incredibly, incredibly efficient startup in terms of the people.

Starting point is 00:17:20 So we're going to see this rise of the, yeah, the nerd turned manager who has their people, but their people are actually instances of AI agents doing large amounts of work for them. Now, this is a theme that you've heard a lot on this show. I have a version of this with my Dr. Strange theory of AI agents, where we're all going to become leaders of armies and swarms of agents that can run scenarios and game out different situations and really let us think about work and productive output in totally different ways. And then, of course, Microsoft's annual Work Trend Index that came out at the end of April, declared that this was the year that the frontier firm is born and coined the term

Starting point is 00:17:59 agent bosses to refer to exactly this idea. In fact, the three big themes. First, you can buy intelligence on tap. Second, human agent teams will upend the org chart. And three, every employee becomes an agent boss. They saw phase three of the frontier firm being human-led agent-operated. AI creator Peter Yang wrote, My hot take is that management skills will actually become much more important in the AI era. I'm talking about skills like giving specific instructions, setting clear expectations, giving examples of what good looks like,

Starting point is 00:18:30 editing and evaluating work. These are the exact skills you need to become good at AI prompting and evals. In the near future, everyone will be managing a team of AI agents. For example, I rarely write a PRD from scratch anymore. Instead, I manage my AI intern to draft it based on my guidance. I think you're going to just see a lot more of this theme coming up, and I'm hopeful that the companies who are interested in upskilling for the AI era will start to shift and think at least as much about this as they are thinking currently about things like prompt engineering.

Starting point is 00:18:58 Then there's this one other piece, though, before we leave, that is also happening, which is that AI itself is creating new roles. Leni Richitsky of Lenny's newsletter and podcast wrote, AI roles are exploding. Here's a chart showing the growth of open AI roles over the last 2.5 years. That's open AI roles, not open AI roles, by the way. There are over 20,000 open roles currently. This came from Lenny's state of the product job market in 2025, and Lenny pointed out that these AI roles are really, really increasing very quickly. And so even as all this is changing and what each additional role will be,

Starting point is 00:19:32 we are already seeing some signs that AI roles will also start to be a new feature of the market. Now, I want to be clear that none of this is to say that the very real transitions and disruptions that are going to happen, are any less painful, or something that we should just blithely gloss over. We do have some really big questions around how we support people in those transitions, how we help them find new opportunities, etc. These are not easy topics, but what's clear is that change is coming and it's happening fast, and that organizations are adapting, if anything, even more quickly than we might have thought. I will continue to try to bring you examples of how things are actually shifting in practice, like the Moderna HR tech example,

Starting point is 00:20:13 But for now, that's going to do it for today's AI Daily Brief. Appreciate you listening or watching as always. And until next time, peace.

The AI Daily Brief: Artificial Intelligence News and Analysis - How AI Is Already Changing Jobs

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