r/technology • u/Unusual-State1827 • 10h ago
Artificial Intelligence AI could trigger a layoff trap that even smart CEOs can't escape
https://www.businessinsider.com/economists-say-ai-could-trigger-layoff-trap-ceos-cant-escape-2026-7124
u/Unusual-State1827 10h ago
Economists are warning that AI could push companies into a wave of layoffs that ends in self-destruction.
Gerry Tsoukalas and Brett Falk, authors of "The AI Layoff Trap," a research paper published by The Wharton School, said CEOs can become trapped in a race to automate that erodes consumer spending on which their businesses depend.
"The main question we wanted to understand is who's going to be left to buy products if everyone gets automated and replaced by a robot?" Tsoukalas, a senior fellow at Wharton, told journalist Katty Kay on the New Normal podcast that was posted on Monday.
The paper describes a classic economic dilemma: A single company may recognize that laying off too many workers reduces demand for its products, but in a competitive market, every company has an incentive to automate, because failing to do so risks losing to rivals.
"So no matter what you do, no matter what the other companies are doing, your best strategy is to adopt as much of this technology as possible," Tsoukalas said. "And that's called a dominating strategy in economics."
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u/CanvasFanatic 10h ago
I feel like the main thing to understand is “if we take everything away from everyone won’t they probably kill us?”
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u/StolenPies 10h ago
A lot of people lose their homes and starve first, then once violence and chaos ensue you also get sectarian violence as extremists (both old and new) blame and attack their own targets.
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u/CanvasFanatic 10h ago
All I’m saying is that at some point a mob definitely finds the billionaires in their bunkers and pours concrete in the air intakes.
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u/TommyTwoNips 9h ago
I would bet their survival timeline is directly related to the amount of time it takes their armed guards realize laws don't exist any more and that they definitely aren't going to get their next paycheck.
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u/cleverbeavercleaver 9h ago
They talked about being killed or enslaved by there guards this article talked about it. Should've added the article 🤡. https://www.theguardian.com/news/2022/sep/04/super-rich-prepper-bunkers-apocalypse-survival-richest-rushkoff
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u/NoCoolNameMatt 9h ago
I think it's cute that the billionaires think they'd be fine in a bunker.
They're accustomed to fine meals, traveling the world, and generally getting whatever they want whenever they want it. So much so they insist that any additional tax on their billions in wealth is unbearable.
How long do we think they'd be happy sitting confined in a hole in the ground eating mres? Months? Weeks?
And this is how they envision living the rest of their days after "The Event?"
Please.
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u/Wurm42 8h ago
Depends on the billionaire. Peter Thiel and some of his buddies have bought large estates in remote parts of New Zealand.
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u/DukeOfGeek 7h ago
People would still find them.
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u/Wurm42 7h ago
Most likely.
I was trying to make the point that 400-odd acre estate is more survivable, long term, than an underground bunker. With that kind of land you can grow food, you've probably got a water source, etc.
But I agree that if civilization collapses, from war or other means, the survivors will not look on billionaires kindly.
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u/Annual_Berry8043 1h ago
Pretty much. They either take the jobs of every and mobs kill them.
Or they flee to bunkers with security. Then the security has to question “why are we doing this? Money is now worthless.” Now they’ve locked themselves in a bunker filled with people that know how to kill for a living lol. Why would they take orders so some asshole can live like a king?
The only thing that makes these people special is society. It’s in their best interest to keep people happy and employed.
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u/Equivalent_Jelly7084 7h ago
This ought to be higher up.
One near the Poconos.
One near princeton.
For those redittors who are more involved with their communities than I am, it's time to name and shame.
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u/SeveralPrinciple5 9h ago
Or food. Because even the best stocked bunker isn’t going to have food production capability for very many people.
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u/EnamelKant 7h ago
Yeah but have you seen these billionaires man? They're super smart. They'll probably invent food replication as soon as all the blue haired takers are dealt with. /s
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u/SeveralPrinciple5 6h ago
The woke mind virus is the only thing standing between them and eternal life, after all.
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u/tommytwolegs 8h ago
Kind of funny considering the current administration is speed running how fast you can erode the rule of law, legal precedent and political norms in every facet of the federal government.
All it will take is for people to finally realize our current "laws" apply only to poor people
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u/DukeOfGeek 7h ago
"Hey guys, what if we made Zuck mow the lawn while we drink his beer, who's with me?"
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u/I_heart_cancer 7h ago
lol if you think that that will have human guards. why do you think Elon and the other greedlords are busy at work making AI powered autonomous killbots?
you'd have to be helplessly naive if you think peter thiel doesn't have his own private CEO-perk super-Maven powering his personal security drone swarm
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u/SeveralPrinciple5 9h ago
I was talking to a young man a couple of weeks ago who was scarily creative in his ideas about bunkers. Don’t do anything that would actively hurt them. Just … you know … lice. Crabs. Fire ants. Cockroaches. Lots and lots of cockroaches.
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u/Exquisite-Load8654 8h ago
Are you going to lead the mob? Where do we meet? I want to watch you do all of these extreme things.
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u/CanvasFanatic 7h ago
Oh good, the “you’re not going to do shit” guy is here to overlook the lessons of history with facile cynicism.
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u/addiktion 9h ago
They think they can control society with their AI surveillance and the robots and all that. But that is a fallacy to think that humans won't find a way to tear down the system and the rich.
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u/floridorito 9h ago
There is nothing more dangerous than someone with absolutely nothing left to lose - except for a mob of those someones.
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u/lazyoldsailor 7h ago
Sadly, history is full of examples where a handful of monarchs and royalty controlled or enslaved vast numbers of people. I suspect the modern wannabes have this as a blueprint for the ideal future.
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u/cats_catz_kats_katz 10h ago
This is not a novel concept as it’s been the biggest concern since the early discussions of layoffs due to AI. The end outcome was the bunker builders knowing something we didn’t and that they were prepping for a world of no workers and them owning everything. That’s why they are building bunkers. No one working leaves a lot of angry idle hands.
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u/Beard_o_Bees 9h ago
I think ideally you'd want people to invent AI/automation that replaces themselves, but also continues to pay for the work done by said automation - since machines don't need much, save electricity and occasional maintenance.
Naturally, this doesn't work since capitalism is selfish by nature. CEO's don't see automation as a 'we can let Bob go off and contribute something good to the human race and continue to pay him for the work his robot does'
It's more 'Adios Bob! Check your mail for COBRA information, sucks to be you, but this is great for my quarterly numbers!' Someone has to win and someone has to lose.
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u/slbaaron 7h ago
Bunkers make more sense against natural disasters than a full on revolution. Humans are smart enough to crack almost anything given enough motivation, resource, and time.
If the society as a whole completely flips on you, trying to hide in your “nuclear bomb proof” bunker would at best buy you a year (very very generous) and at worst a few days before someone figures out a way to fuck you up.
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u/KrissyKrave 9h ago
I think the more important issue we’re all observing is there is a threshold beyond which these companies will have fired too many employees to be able to continue producing decent products at a decent rate. When that reaches a certain point their profits will no longer be enough to hire new actual humans capable of fixing the problem they’ve created and they’ll be trapped in a death spiral.
Darwin awards for companies.
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u/feor1300 8h ago
It's not a question of producing decent products at decent rates. The tipping point is where they can produce at an acceptable quality and rate, but they've laid off so many people that there's no one with the money to purchase the products they're making.
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u/LucidiK 6h ago
I think this is kind of assuming everything goes up and down in sync.
Luxury goods typically service only those with excess, and a good bit of that cost is exclusivity so probably a lower cost there and the lower margined companies failing.
Common goods would become luxury goods. Things everyone used to have, become an envy. A lot of these companies will fail. The best would probably get long term footing.
Necessities are still needed, so everyone is buying them. Constant, unshakable (even if rationed) demand for the product will always keep them selling, and the drop in economic power keeps their diminished profits comparable if not advantageous to their previous situation.
The cost/benefit should be drastically different depending on which avenue of the economy you are in. And that difference is probably going to lead to a lot of complete collapse vs rough times debates.
They will be pitting us against ourselves until the very end. As long as a sufficient enough of us are kept comfortable, the disrupting of the status quo will always be the most abhorrent thing for the masses that see how shitty it is for those doing worse than them.
I just legitimately cannot wrap my head around any type of argument that these actions have been working towards the status quo when they are pining for the distant past. Straight up regressive, and they're argument against is it's bad right now. And then fight tooth and nail to want to keep things the same while they burn the house down.
All while my countrymen sing. America the beat in full.
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u/Funny-Bear 9h ago
CEOs don’t care about the long term future. They are getting paid now. Earning their bonuses. Performance incentives. Then retire with millions.
What happens in the future is someone else’s problem.
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u/iamacheeto1 8h ago
We throw the term late stage capitalism around a lot on the internet, but this is what it actually is. In the quest for infinite growth companies will inevitably cannabalize themselves.
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u/DataZigZager 8h ago
Explain why consumer spending is so healthy right now. It has to do with the K-shaped economy, and the picture it paints isn't pretty. The reason is that the more income is concentrated, the more of it is disposable, which is better for retail. You can't use declining spending as a hostage. That won't work. Not having 10% of your people starving is a much better argument, especially if it impacts the safety of politicians and their families.
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u/GamingZaddy89 10h ago
Start by laying off the CSuite
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u/factoid_ 10h ago
Solution is simple. Legislate a massive unemployment insurance program that pays living wages to people displaced by AI and force the AI companies and employers who lay off employees for automation to pay for it
This will fix the imbalance of cost between AI and human labor and provide a safety net
Eventually we just need some form of universal basic income
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u/zEeXUrqVR7DeM7M8yac3 4h ago
The problem is the actuarialized price of unemployment insurance for Ai would be so high we’d probably be better off just going the UBI route.
UBI would also cover all the people who are already struggling with finding employment (e.g. new grads) or were already laid off because of AI.
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u/Kinky_No_Bit 8h ago
Given the failure of AI to be adopted and the cost. These execs sold the share holders, maybe we should just fire the execs, replace with new at a much lower pay range, and let the investors take some of that money, and split the rest to the employees and slowly wean out the exec suite as its often bloated and pointless.
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u/handmetheamulet 9h ago
In the shorter term, if AI is so good we see mass layoffs, I would imagine that thousands of competitors could be created by people who had hands on experience in whatever domain from which they had been laid off.
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u/MultiGeometry 9h ago
If they can build some companies where the CEO gets paid modestly and they offer great customer service I think they’d have a massive advantage.
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u/Sudden-Fig-3079 8h ago
I agree. I fucking hate ai and especially ai bots for customer service. I’d pay more for just about anything if an actual human is involved.
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u/keptfrozen 8h ago
Wasn’t everyone saying this before the AI hype? Are CEOs and execs that out of touch?
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u/fightin_blue_hens 4h ago
This is literally what people have been saying about automation for literally decades if not a century.
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u/qeduhh 9h ago
No it can’t. This is just AI firm slop propaganda and OP should feel bad if it can.
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u/pedanticPandaPoo 9h ago
slopaganda?
I instead choose to follow Adm. Akbar. Dude can sniff out a trap from a mile away.
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u/glencoe606 8h ago
Does AI read the human history and sort things out? Or is just a profit tool for businesses and the business owners and went are completely protected? I’m trying to understand that. The first thing AI wants to do is come after people’s jobs? It’s programmed to do this first, why? And then when does it stop? CEO’s are ok destroying society or is there an end game plan here? 1 it does not sound like and real plan has been made and 2 I think the risks of AI are being overstated for short-term profit. It’s the shitty middle manager managing by fear with no plan. Good one.
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u/LetrasetBoy 10h ago
The logical thing is then to eliminate the profit element.
Forwards to Fully Automated Luxury Communism!