Yogi's Blog

The news feed is filled with the updates of people losing jobs to AI. Big companies implement AI and lay off hundreds or thousands of workers, because their job is delegated to the AI.

Artificial Intelligence is the new shiny toy and everyone wants it, because that’s what humans do: humans want anything that’s new and shiny. Everyone wants the latest and the fastest AI. Just like any new & shiny toy AI costs real money. Here comes another human trait. The sellers want a very high price for whatever they’re selling and the buyer wants to pay the bare minimum or nothing.

The business consultants have solved this problem for some time now. That is solved by ‘externalizing the cost’.

Externalization of cost is ‘I keep the income and someone else pays the cost.’ This wiki page by P2PFoundation gives a good primer on Externalization of Cost <https://wiki.p2pfoundation.net/Externalization_of_Costs>. 

In the case of AI implementation, it is a business decision rather than necessity to carry on the business. This decision is made by the corporations, hence the corporations ought to pay for it, but they choose to externalize the cost to the workers by simply declaring that the AI is now doing their work, so they are redundant. As the record shows most of these corporations hire workers for the same positions (of course a newer set of them, so they’re cheaper).

Have we replaced Rory Sutherland’s doorman with a sliding door? Yes, an automatic sliding door can be priced. What about the cost of removing a doorman? I think a doorman can be removed, not replaced. Who will welcome the regulars, hail a cab, keep an eye on security incidences? That plus a loss of employment for one doorman is the cost.

A court in China rules firms can’t lay off workers on AI grounds. The court observed that the decision to implement AI was a choice and does not meet the legal standard for a company to terminate an employee.

Of course AI has made its way into the C-Suite discussions. One of my favorite sci-fi writer Cory Doctorow has written (&spoken) a lot about AI recently. I would recommend this transcript of his lectures at UW: https://pluralistic.net/2025/12/05/pop-that-bubble/#u-washington

The promise of AI — the promise AI companies make to investors — is that there will be AIs that can do your job, and when your boss fires you and replaces you with AI, he will keep half of your salary for himself, and give the other half to the AI company.

Cory Doctorow

To conclude: The AI induced layoffs have little to nothing to do with the efficiency or the capabilities of AI, it is a business decision to externalize the cost and pocket some more benefits.

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