Welcome to the Lightning Round

Above this post, when I attempted to type “Welcome to the Lightning Round,” my spellcheck suggested “Welcome to the Lightweight Round.” Perhaps that is closer to the truth, but it cuts a little too close to the bone for my liking. Let’s stick with the original title.

I’ve been reading, among other things, a biography of Arthur Schopenhauer, the notoriously pessimistic 19th-century philosopher. Like many of us, Schopenhauer was a complicated person. He was particularly adept, however, at formulating incisive aphorisms. What follows are not aphorisms, strictly speaking, and perhaps they’ll fall short of incisiveness, but I offer them for your enjoyment. I’m not aiming at edification or instruction, but if you get any of either from the ensuing commentary, consider it a bonus.

In the leadoff position — hey, the baseball season commences this week — we find a brief item from Seeking Alpha observing the failure of bitcoin and other cryptocurrencies to rise amid the current war in the Middle East. Here’s the salient paragraph:

The broader downturn has erased roughly 20% from Bitcoin’s value since the conflict began in late February, undermining the long-held narrative that the asset can serve as a safe haven during geopolitical crises.

Here’s the truth: Bitcoin is not a store of value; it’s a risk asset, like securities, but arguably riskier and therefore worse. I think the entire premise for any investment in Bitcoin is the “greater fool theory,” in which the lesser fool (‘m trying not to judge here) splurges on an overpriced asset on the assumption that he or she can sell it at a profit to the eponymous greater fool. If there’s a fool born every minute, as the adage goes, not all of them are old enough to buy bitcoin, but enough of them seem to be of age and sufficient profligate to keep cryptocurrencies and meme coins afloat.

Tech layoffs are back in the news. Perhaps I should amend that sentence and say tech layoffs are still in the news. Indeed, the shedding of tech jobs, occasionally (but not always) replaced by new tech jobs, seems a fixture in the news these days.

Meta: Cuts and Bonuses Abound

Are these lost jobs being supplanted by AI? In a way, yes, and in another way, maybe (but gravitating toward another emphatic yes). There’s no question that tech companies are reallocating personnel and expenditures to AI, cutting back in other areas. This is where most of the AI-related job displacement is occurring, but there’s also anecdotal evidence, likely to be followed by corroborative data, that AI agents and bots are beginning to take jobs from human employees (more on which later). There are limits to how far and wide these bots can be put to work productively, but AI already seems well suited to certain closed-loop processes hitherto performed by flesh-and-blood employees.

At Meta, where moving fast and breaking things was company policy, the human-resources scythe is apparently being wielded with unseemly gusto. Among the many reports on job cuts at Meta is thisone from Reuters, which notes that Meta is laying off a few hundred people across multiple teams. In an earlier article, referenced in the Reuters piece today, we learned that Meta’s plans reportedly include extensive layoffs that could involve up to 20% of the company’s employees. If Meta has given up on moving fast, it’s still apparently big on breaking things. Of today’s personnel cuts at Meta, reports indicate that they will affect staff in the company’s Reality Labs division, social media teams, and recruiting ​operations.

My perception of how quickly I am sluicing through time has accelerated with age. It feels like only yesterday — or not that long ago, anyway — that Meta chief Mark Zuckerberg was extolling the rich commercial promise and dystopian entertainment value of the Metaverse, the ominous virtual playground that inspired Zuckerberg to change his company’s name from Facebook to Meta.

Meta’s Reality Labs division, as you might know, was directly responsible for the company’s development of virtual reality (VR) and augmented reality (AR) hardware and software. These technologies, of course, are foundational to what was hailed as the metaverse. For the record, Meta still has virtual real estate committed to the metaverse. Even so, I get the feeling that the company is becoming averse to the concept, akin to how John Cleese’s Basil Fawlty admonished his hotel staff not to mention the war (WW II, not the current one).

Mark Zuckerberg wasn’t the only technology executive who zealously touted the metaverse and something that was vaguely defined and aspirationally called Web 3. Perhaps you remember it. If you were selling it back then — in the benighted era earlier in this decade — you’re probably pitching AI now. I’m not suggesting AI is destined for the ignominious demise of Web 3 and the metaverse (by the way, there’s no way I’m giving that accursed digital hinterland an upper-case social status). What I will propose, though, is that we might want to view the fate of the those technological chimeras as a cautionary tale, one that instructs us to exercise a modicum of restraint and skepticism when a tech overlord delivers a proselytizing sermon.

Not everybody at Meta is facing the axe. The Wall Street Journal reported today that the company is incentivizing its top executives with a stock-option program that could provide the fortunate few with additional remuneration of hundreds of millions of dollars. To qualify for the bonanza, executives must contribute to the aggressive growth of the company. The full value of the options would be realized only if Meta attained a market capitalization of more than $9 trillion by 2031, an increase of 500% from its current $1.5 trillion, according to the company and new filings with the Securities and Exchange Commission. Zuckerberg isn’t being incentivized as part of this program, but I’m sure he won’t go begging if his lieutenants make their numbers.

Blue-Collar Renaissance?

We discussed layoffs earlier, but jobs are being created, too. Semafor, piggybacking on a report from the Financial Times, pithily reports that Open AI plans to nearly double its headcount to 8,000 employees this year. The article includes a slide from Goldman Sachs purporting to show the share of jobs in the United States exposed to AI automation.

The places to be, if job security is your primary concern, appear to be “construction and extraction” and “installation, maintenance, and repair,” both of which are only marginally susceptible to AI incursions, according to Goldman Sachs. The most vulnerable jobs are in “office and administrative support,” closely followed by “legal.” On the whole, Goldman Sachs estimates that AI threatens about 25% of “all occupations.” The timeline for this professional exposure to AI automation is 10 years. You can read more about the Goldman Sachs’ research here.

If Goldman Sachs is correct, and only time can confirm the accuracy of the estimates provided, job security will accrue to blue-collar professions rather than to white-collar vocations.

Tell the kids to get digging, building, or fixing.