Is the AI-caused white-collar job-apocalypse here or are the mass-sackings just a boardroom trick designed to boost profits and discipline workers?

More and more large tech firms are engaging in mass-sackings of software developers and other higher-paid, higher skilled workers.

Fintech firm Block has sacked 40 percent of its workforce and crisis-ridden logistics software company WiseTech is sacking 30 percent of its workforce. The reported justification is AI innovation and productivity — the software writing of LLM models is now good enough that “the era ⁠of manually writing code ⁠as the core act of engineering is over”.

Far from a structural reset in response to technological necessity, the mass sackings are a response to a crisis of profitability.

AI is a thing, an inanimate tool that is used by the financial elite and the Silicon Valley techno-oligarchs to impose austerity and break workers’ bargaining power to increase profits.

Block’s share price collapsed by 80 percent in the years since its disastrous Afterpay acquisition, so the company is now using mass layoffs to “pull a rabbit out of a hat” for investors. The rabbit is the promise of profits and capital growth — the hat (which hides the trick) is the excuse of AI-driven tech.

Capitalists use automation to increase profits through decrease the amount of time they have to spend employing humans. This increasing profits by intensifying how much value is extracted from the remaining workers.

Software engineers have historically been the most profitable employee, but this also meant they could command very high salaries from the Silicon Valley oligarchs. There has always been a resentment among the tech oligarch class and financial elites towards software engineers — their grand wealth was dependent on a handful of workers who built the money-making software.

Crumple zones and centaurs

That is why US tech billionaires and financial elites have invested so heavily into building tools tools that can write, test, and maintain code” — to proleterianise the software engineers. Under capitalism, even the labour aristocrats — the highly skilled, highly educated workers like developers, doctors, lawyers find themselves attacked by AI. The corporate executives and billionaires want to ensure skilled workers lose control over their craft and become interchangeable appendages to a machine.

The transition of the software engineer from a creative “builder” to a “human crumple zone” is a a new manifestation of worker exploitation. Its the latest version of work intensification.

In car safety, a crumple zone absorbs the impact of a crash to protect the human passengers. In the AI economy, the remaining human workers are there to absorb the impact of algorithmic failure.

The AI generates the enshittified output but the human remains legally and professionally responsible for errors. They are the crumple zone for corporations, where the human takes the blame for systemic technological flaws, while the corporation pockets the efficiency gains of work intensification.

Additionally, for white-collar knowledge workers, there is now knowledge production lines, where the AI dictates the pace of production. Just as factor workers must physically match the inhuman speeds of industrial machines, AI-using workers like software developers and lawyers must review AI-produced slop (garbage code, false legal citations) at an impossible intensity level.

Cory Doctorow describes this as the “reverse centaur” — humans must serve the needs of the AI horse.

Crisis of profit and safeguarding the capital order

The mass sackings are written up in the mainstream media as the consequence of innovation and technological progress. What they are in reality though is the corporate response to the crisis of profit.

In short, the crisis is where billionaires and the financial elite can no longer find profitable avenues for reinvestment their billions in making real goods and services. This leads them to put their billions into highly speculative, highly risky financial bets (like collateralised debt obligations behind the Global Financial Crisis, crypto and NFTs).

This crisis is in large part caused by “over-accumulation”, where additional investments fail to create new profits. For example in global manufacturing, there is a significant overcapacity because new companies constantly enter the global market capable of producing goods more cheaply, thus making existing investments in productive capacity obsolete and unprofitable.

The same is happening on the technological/digital side — investments in developing new software to create profits is undermined by new entrants, especially with AI.

An example recently is the launch of a Claude model by AI company Anthropic that hit the share price of software companies like Xero, Infosys and Atlassian. Those share price decreases are on expectations that those companies will not make as much profits. Telstra and Commonwealth Bank have signaled similar cuts, even while denying direct links to AI.

Corporate executives present these sackings as inevitable, caused by “efficiency” and “product velocity”. When companies cannot find new profits growth, they resort to industrial austerity — sackings and work intensification to squeeze as much as possible from the existing workforce. AI is making software faster so that it can be turned into profit faster than a new competitor can render that investment unprofitable — that is what “product velocity” really means.

The financial elite has engineered a global system that enables them to generate vast wealth through financialisation, debt leveraging, and inflating the prices of assets like real estate, stocks, or the current AI infrastructure bubble.

Because speculative investment creates fake GDP growth, and boosts GDP more than real productive expansion, less investment reaches the “real economy”. This causes broader economic stagnation, wage suppression, and a cost-of-living crisis.

The technocratic state

What some commentators are surprised about is the unwillingness for governments to protect the jobs being impacted by AI — for all the talk of AI job-apocalypse, governments are more interested in intensifying AI roll-out than slowing it down.

This is because broadly, most governments existing in a political and economic system that is deeply intertwined with the goals of the financial and tech oligarchy. The state in a capitalist society has always structurally been compelled to prioritise capital accumulation to maintain the economy.

Since 9/11 and the Global War on Terror, Silicon Valley has deeply integrated itself into the security state. Palantir is the most egregious example of this, but software and AI is both supporting military and surveillance infrastructure and also extracting wealth from it.

Australia for example is the sub-imperial off-shoot for the US Empire — we are a hub for the US tech giants’ further profitability in the same way that fossil fuel giants extract our gas and coal, and the US military uses our territory as a forward operating base for marines and NSA spying.

The crisis of profitability is also of major concerns for governments politically. In much of the Global North and especially the USA, the fictional GDP growth created by data centre investments is the only thing preventing a technical recession. Of course, most people are experiencing a recession in the real economy.

However, boosting the GDP and other national statistics to pretend that there is not real economic stagnation is also a major rationale for governments to do nothing to prevent AI expansion and mass sackings. Governments in the West have had decades of laundering the corporate and investor justifications for mass-sackings in service debt and fund enormous stock buybacks.

Consequently, AI-driven job displacement is viewed by the state as just another normal, unavoidable phase of market efficiency.

Accountability

AI didn’t fire you. The board did. And that distinction matters.

Professor Niusha Shafiabady, The Lowy Institute

Billionaires and CEOs like Jack Dorsey, and much of the corporate media, present AI as an inevitable force of nature or as a neutral, non-political “new industrial revolution”. What is rarely presented is that mass sackings are a deliberate corporate choice made by CEOs and executives, and billionaire financiers.

If our governments decide to do nothing, the result is that corporate profits and billionaire wealth will drive decisions that impact all of us.

If we do not reject the idea that “replacing humans with code” is a non-political, strategic business move, we accept a future of permanent worker precarity and extreme wealth concentration.

If we do realise that the rapid and unconstrained financing of AI dynamic is a form of massive upward transfer of wealth, we will continue to allow the billionaires to direct investments away from desperately needed social goods like affordable housing, health and education, and renewables.

If we can’t see that the magic trick, the rabbit in the hat, is using AI to distract from the inherent rot and instability of neoliberalism, we will continue to be fooled and ruled by the investors and billionaire Epstein Class.

What’s missing from this is the role of climate change — AI as we know consumes vast amounts of energy, water and material. The vast expansion of AI and data centres is pushing further the limits of the natural world. The “innovation” of AI is further being weaponised through the climate crisis and eco-collapse to discipline and manages workers.