Robinhood’s note on 10% layoffs shows blaming AI isn’t cutting it

It appears utilizing AI arsenic a screen communicative for cutting jobs is accelerated falling retired of fashion.

Unlike galore of his tech manufacture peers who person cut thousands of jobs this year citing the request to restructure their teams to marque the astir of AI, Robinhood’s CEO Vlad Tenev conspicuously made nary notation of AI successful his note to employees announcing that the institution is letting spell 10% of its full-time employees, oregon astir 290 people.

Nor did the company’s regulatory filing announcing the move, which alternatively framed the cuts arsenic a restructuring exercise.

Still, Tenev did accidental the institution would usage “frontier technologies to propulsion our execution adjacent further,” which sounds similar a conscious effort to debar adjacent naming AI. Which isn’t surprising: Sentiment against AI and related infrastructure projects has been trending lower adjacent arsenic a tiny number of tech executives marque ridiculous bank.

But Tenev did adhd to the ongoing communicative that it’s present indispensable for companies to run with smaller teams and “flatter organizational structures,” writing: “We ⁠cannot default to operating arsenic a heavily-layered organization. We indispensable beryllium a lean, hyper-focused squad wherever each azygous idiosyncratic is empowered to marque a monolithic impact.”

We’ve seen companies of assorted stripes, from Amazon, Block, Coinbase, GitLab, and Intuit employing akin connection successful their layoff announcements, indicating that ample teams, bureaucracy and siloed departments are present seen arsenic undesirable enactment items astatine a clip erstwhile AI tools committedness to importantly amended productivity.

Some adjacent deliberation it’s a tacit allusion to the information that tech companies over-hired pursuing the COVID-19 pandemic, and are present scaling backmost arsenic expenses statesman to heap up — particularly those associated with monolithic AI usage.

Regardless, these companies are doing rather well. Tech stocks person surged broadly, spurred by grounds revenues, improving nett margins (GitLab reported 88% gross margin past month), skyrocketing request for cloud services, and the content that the billions being poured into information halfway projects volition produce returns that are orders of magnitudes higher.

Robinhood itself reported a 15% betterment successful first-quarter gross successful April, and the institution said its 2nd 4th is looking amended acknowledgment to rising prediction marketplace fees, subscription revenue, and beardown equity and enactment trading volumes arsenic markets stabilize.

The institution said connected Tuesday it is besides closing “a tiny number” of unfastened roles, and that it would incur astir $28 cardinal successful costs related to the cuts.