It seems that using artificial intelligence as a cover for cutting jobs is fast falling out of fashion.
Unlike many of his tech peers who cut thousands of jobs this year citing the need to restructure their teams to make the most of AI, Robinhood CEO Vlad Tenev conspicuously made no mention of AI in the note to employees announcing that the company is letting go 10% of full-time employees, or about 290 people.
Neither does the company’s regulator archiving announcing the move, which instead framed the cuts as a restructuring exercise.
However, Tenev said the company would use “cutting-edge technologies to push our execution even further,” which sounds like a conscious effort to avoid even calling it AI. Unsurprisingly: Emotion against AI and related infrastructure projects voltage lower even as a small minority of tech executives do ridiculous bank.
But Tenev added to the ongoing narrative that it is now necessary for companies to operate with smaller teams and “more flattering organizational structures,” writing: “We cannot operate as a multi-layered organization. We need to be a lean, hyper-focused team where every person has the potential to make a huge impact.”
We’ve seen companies across the board from Amazon, Block, Coinbase, GitLab, and Intuit use similar language in their layoff announcements, indicating that large teams, bureaucracy, and siled departments are now considered unwanted line items in an era when AI tools promise to dramatically improve productivity.
Some even believe it’s an implicit allusion to the fact that tech companies over-recruited after the COVID-19 pandemic and are now declining as costs begin to pile up — especially those related to the massive use of artificial intelligence.
Regardless, these companies are doing pretty well. Tech stocks have broadly rallied, spurred by record revenues, improving margins ( GitLab reported 88% gross margin last month), demand for cloud services and the belief that the billions to be poured into data center projects will produce yields that are orders of magnitude higher.
Robinhood itself was mentioned A 15% improvement in first-quarter revenue in April and the company said the second quarter looks better thanks to rising prediction market fees, subscription revenue and strong equity and options trading volume as markets stabilize.
The company said Tuesday it is also closing “a small number” of open roles and will incur about $28 million in costs related to the cuts.
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