CEOs know AI will shrink their teams — they're just too afraid to say it, say 2 software investors
"Public companies are trying to prepare their teams for it, but the backlash was too strong," said Jason Lemkin, an investor in software startups.
Instead, CEOs fall back on the safer line: "In fact, we're hiring."
"That seems to take the edge off," Lemkin said.
"But I think they're just walking back the fact that everybody knows they don't need 30% to 40% of the team they have today. Everybody says this," he added.
"It's too hard for people to hear. There's only so much honesty you can get from a CEO," he said.
Rory O'Driscoll, a longtime general partner at Scale Venture Partners, said CEOs can't talk about job loss because employees will "lose their shit."
He said what ends up getting shared publicly is a "very bland statement" full of "standard corporate speak for how you talk about AI."
"No one is going to get fired. You're just going to do more interesting things," O'Driscoll said. "That's the current state of the lie."
From Klarna to Duolingo, several companies have tested the waters with bold AI declarations — only to backtrack.
Klarna' CEO, Sebastian Siemiatkowski, said in December that AI "can already do all of the jobs" humans do, and that the company has stopped hiring for over a year.
But earlier this month, he walked it back, saying his pursuit of AI-driven job cuts may have gone too far.
Duolingo's CEO, Luis von Ahn, also faced criticism after posting a memo on LinkedIn last month describing plans to make the company "AI-first."
He later said on LinkedIn that he does not see AI replacing what his employees do and that Duolingo is "continuing to hire at the same speed as before."
Lemkin and O'Driscoll did not respond to a request for comment from Business Insider.
Layoffs are happening
Lemkin said mass layoffs could hit in the next two years as companies come to terms with a new reality. He added that he expects overall headcount to "stay flat."
There will be "efficiencies" and also "jobs that would have existed in the absence of this product that won't exist now," said O'Driscoll. "So there will be tension."
O'Driscoll said he sees a gradual shift — more of a "steady grind" of 2% to 3% less hiring each year.
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