Making sense of the layoff wave

In this episode, Reid and Aria unpack the growing panic around layoffs, the actual impact of AI on work, and why autonomous agents are reshaping productivity faster than most people realize. Reid points out that today’s layoffs are being erroneously blamed on AI, rather than on economic turbulence and post-COVID refactoring. The conversation then turns to the viral ClawdBot/Moltbot/OpenClaw moment and explores what it means for productivity, security, and trust when autonomous agents can not only act across email, calendars, files, and financial systems, but also interact and gather with each other. The episode closes with a pivot to politics, as Reid explains why Silicon Valley and business leaders can no longer claim neutrality in today's polarized political landscape, arguing that real leadership requires speaking up before it’s too late.

• 0:00Speaker 00

  Reed, it is lovely to be back here. For anyone who hasn't listened to Parth on Read Riffs for the past three weeks, please go back and listen because they were so fantastic. And unfortunately, we're going to start with a not positive topic. So last month was the worst January for job cut announcements since the Great Recession. U.S. companies announced 108,000 cuts. It was 120% increase year over year. And hiring intentions also fell 13% from last year, hitting their lowest level since 2009. So there are some not great things happening in the workforce. And almost half of the January reductions were linked to just three companies, Amazon, UPS, and Dow. Some people are saying that AI is to blame.

• 0:44Speaker 00

  They've been talking about white collar job cuts for a long time. They're saying that this is the fruits of that labor. Some economists say this isn't so clear. Many of the people who are laid off were saying, no, I was using AI. I was on the front lines and I still got laid off. My question for you is, what should we make of this continued layoff news? Do we think that AI was behind it? Or are they just being branded that way?

• 1:09Speaker 01

  I've asked a lot of different people who have a, call it, industry-wide views, is if they're actually seeing any data yet as to layoffs or job replacement from AI. And it isn't to say it can't happen and will happen, in fact, and in which ways and so forth. But literally, everyone I've talked to who isn't just kind of trying to spout a line in order to get a lot of media attention, has said, no evidence has yet. And you say, well, but why are there layoffs? And why are there challenges? Well, there's a lot of things. There is the kind of a whole bunch of weird hiring and organizational things

• 1:54Speaker 01

  from COVID that are getting refactored. And when those are getting refactored, you, A, refactor in layoffs, you also have less, you know, kind of entry job level, you know, hiring. Others...

• 2:06Speaker 01

  Are we living in extremely turbulent time for businesses, for businesses to invest? They need to have predictability, you know, kind of the tariff roller coaster of what tariffs will be when and so forth. You know, I literally know of, of, of, of CEOs who have said, if I could sell my US business unit, I will because I can't deal with this roller coaster anymore. And so, you know, there's all of that factoring in as well. Now, like I said, this isn't saying that there couldn't be, you know, here in 2026, some things that actually really start on that, you know, in, you know, white collar things, customer service would tend to be the one that

• 2:48Speaker 01

  I think you'd really see first and be one of the most likely places of data. I've done enough work that I actually have seen of kind of startups and small businesses that they're like, well, we used to have three people doing this. Now we have one, but not the case that I've talked to them and it's been more like all the, it isn't that they fired the other two. It's like, well, now these other two can do all this other work that we need to have happen. So one of the things that usually happens in a small business is, well, shit, we've got all kinds of ways that we can grow the business. We actually want these people doing this stuff now. And, you know, most notably, actually, by the way, entertainingly, where I've had the deepest conversations of those are in the podcasting business where, you know, kind of what are

• 3:30Speaker 01

  we doing for audio management and all the rest? And like, you know, the kinds of things that you and I are doing with these read riffs of putting them out in all these different languages. That's actually in fact, something that we, we wouldn't have done if we didn't have it. We could do. Now you'd say, well, if you were gonna, if you didn't have AI and you wanted to do it, you would have had to hire a whole bunch of people. It's like, yes, then it would not have been economically feasible and management feasible and we wouldn't have done it. So it's again, it's not a job loss for something that otherwise would have been hired, you know, kind of point of view. Now, what I do think is that we will continue to see from lots of different reasons, the top

• 4:12Speaker 01

  thing is that people are pointing to AI for anything that happens. I think it's because, you know, hey, it's like, like, here's a parallel. Usually what happens is you get a market correction.

• 4:28Speaker 01

  And then, you know, it's very rare that one company is doing layoffs. If one company is doing layoffs, then that means that company really was kind of out over its keys and having problems. But one of the odd things you can notice is that you go, oh, we have a layoff season. And then all of a sudden, a bunch of companies that don't economically, like, aren't economically compelled to do a layoff, e.g., you know, we're going into the red, we can chart when we're going out of business, revenue is collapsing or something else. But they do a layoff then is because they can then do a layoff where they don't look weak. Because most times, a layoff signals, my business is in trouble.

• 5:13Speaker 01

  You, as an investor, might want to run for the hills. It's a, it's a challenging time. So companies only want to do layoffs when they're away from the pack, when they absolutely have to. Right. They will do them, and it may be a very good thing for them to do. This is not saying it's cruel or in a house, but it's like, well, action factor. This whole division that we've been investing in, action factor is not going to work, and we should really, like, refactor. It's part of what makes business efficient. Then you have a layoff season. Now, of course, we have a new layoff demon. It's an AI layoff demon. Right. And that AI layoff demon is like, oh, it's because my business is strong.

• 5:55Speaker 01

  It's because I'm adopting the new technologies and so forth, so I'm doing layoffs. So you have this new kind of bugbear. And I think that's one of the reasons why you see already, last year, a bunch of different CEOs saying, yes, yes, I'm fully adopting any AI, and I anticipate layoffs because of this, because it's, I'm strong, and if I need to change this, this is scapegoat. I'm a company you should, well, I'm a company you should be investing in, because it's a signal of strength, not weakness. And then you've got, of course, the drama, the, it's dramatic for the press. It's like, you know, as opposed to, whoa, it's layoffs. Now, look, company X is not doing so well, which, you know, they'll do, but it's like, okay, once you did that, sorry. But it's like, oh, it's part of the, you know, the hero versus villain story of the

• 6:39Speaker 01

  human laborer versus the AI replacement. You know, the dock fight is at noon, cameras will be rolling, you know, et cetera, et cetera. And it's like, you know, so the press wants that, the, by the way, so would the government obviously want this, because it's not like, oh, because we have These totally terrible business management tariff.

• 7:01Speaker 00

  Right.

• 7:01Speaker 01

  You know, let's try to make the rest of the world buy Chinese, not American by what we're doing, you know, kind of policies. It's not that, it's AI. Right? So, so there's going to be all of that. And by the way, none of this is saying that there won't be this year even some substantive job transitions that come about for it. And it's an important, big thing to try to navigate. And we should be trying to figure out how to navigate it for individuals, for companies, for industries, for countries. Right? Everyone should be working on kind of some of the transition, even though I think almost none of the numbers have anything to do with AI yet.

• 7:45Speaker 00

  Right. Thus far, they really haven't been attributed to AI, or they shouldn't have been attributed to AI, but we might see it in 26 and 27. And I know you don't want to and can't predict the future, but if you were to guess where we were going to see sort of the first AI job loss, you said customer service, but do you expect that to be more in the tech sector or more in the non-tech sector? Is this going to be in, you know, durable goods? Is this going to be in retail? Is this going to be in sort of more traditional tech?

• 8:15Speaker 01

  I think it'll be in the largest sectors that hire the most customer service people.

• 8:26Speaker 00

  Gotcha.

• 8:27Speaker 01

  And by the way, we may not even see it in US numbers in 26 because a lot of those people are already driving Philippine shops and India shops and everything else. And it may help, it may hit there first. And I haven't actually done that study. Maybe that's even started in 25.

• 8:44Speaker 00

  Right.

• 8:44Speaker 01

  You know, with companies like Sierra and Parlo and other, other folks. Because the natural dynamic is to say, well, can we replace?

• 8:54Speaker 01

  Seventy percent of our current customer service cost get much higher outcomes by doing this and just retain the absolute best CS stuff for the things that the AI can't, can't, can't directly handle. And it's a natural thing to do. But of course, if you have a tiny customer service department, because it's very rare, it's like, well, why go through all that energy and hassle to do that? Whereas if you have a big expense, then it's like, that's a very natural thing to go. And I, you know, I know of dozens of companies that have already part piloted it, you know, through, you know, talking to some of these AI customer service companies. And so that's part of the reason why that.

• 9:37Speaker 01

  Now, that being said, you know, as you know, my advice to everyone is start using AI. And my advice to, to college graduates who are saying, hey, this is a sucky time for entry level jobs, which again, I don't actually think is because of AI yet from anything I can tell. And I have a lot of different cross industry views. But it is because of, hey, we got business turbulence, we're not hiring, we're refactoring, you know, it's the, it's tariffs, it's COVID, etc. Well, but all the businesses know that they need AI. And so, you know, my kind of categorical advice is, you know, basically use AI.

• 10:22Speaker 00

  Right, absolutely. We know one thing for certain that AI is coming, and so we better be using it.

• 10:28Speaker 01

  Yeah. Well, and also, as a graduate, you can be saying, I'm AI native.

• 10:33Speaker 00

  Right. Hire me because I know what's up.

• 10:35Speaker 01

  And I can help you as an organization with this.

• 10:38Speaker 00

  Right, make that transition.

• 10:39Speaker 01

  Old people adopt much more slowly.

• 10:42Speaker 00

  Totally.

• 10:42Speaker 01

  We can help, right? And I think that's the thing that we want to, you know, be driving for those, for those people and for those folks.

• 10:51Speaker 00

  Absolutely. So Reed, moving away from sort of the economic side of AI to the technical side, I think most of our listeners probably heard about Claudebot, which was renamed and then renamed again to Maltbot and then became OpenClaw. And it went massively viral as the past few weeks for agentic tools that can actually do work. This is not just a chatbot that you're asking back and forth. It is doing things for you across your inbox, your calendar, your files, your browser. Like it's, it's, this is the dream for AI to be actually doing work for people. And so the hype here is that this is the beginning of the AI employees that people are talking about.

• 11:31Speaker 00

  And so immediately there was backlash with, is this safe? Are we giving people permissions to our credit cards, to our email inboxes? Is this an attack surface for all sorts of malicious attacks? Because none of this is safe. But I think actually the most sort of interesting and hilarious weird thing that happened was the explosion of autonomous agents and it spilled into places like Maltbook. So this is like a Facebook. It's a bot for social network and agents were talking to each other. Some of the things they were saying were debunked, like the fact that they had to do 10,000 CAPTCHAs to just get into the Maltbook social network.

• 12:15Speaker 00

  But others were real with agents talking to each other about their human overlords. So how should we interpret this Claudebot moment? Both from a, whoa, this is one of the first times that agents are doing real work to also this is really weird.

• 12:31Speaker 01

  Look, this is a very significant moment. And part of the significant moment is because, you know, as you know, Aria, I think that one of the reasons I'm paying attention a lot of the coding accelerations is not just because it accelerates the pace within the technology industry. Like it accelerates what happens at startups. It'll eventually be what's happening in, you know, essentially technology industry everywhere. But it's also the kind of the basis for the productivity amplification for all knowledge work, all information work. And there's a couple of different ways of looking at that. One is the fact that, you know, like talking about last year, voice pilling, like the whole thing will be interfaced through voice.

• 13:12Speaker 01

  But part of the voice will be getting it to be doing more extensive work, which is not just, you know, like scripting your computer and doing much stuff, or, or being your travel agent and, and booking stuff for you and researching and so forth. But also as the work grows and you begin to think about the kind of work you do, it's like, well, can it do more sustained reasoning tasks when it's doing research? When it's doing analysis, when it's doing communication, when it's doing coding, when it's doing legal work, when it's doing education, when it's doing grading, when it's doing, you know, da, da, da, da, on and on and on and on. And the coding capabilities underlie that increased,

• 13:56Speaker 01

  you know, kind of reasoning, sustained work capabilities. They do it themselves. They also create the models, the, the kind of the fitness function training model, but which the fitness function and training model kind of goes to parallels for when you're doing your next generation of, of a legal, paralegal assistant, you know, or kind of, or, or of a, you know, cheap law assistant for everyone, or maybe free, everyone looking at their renter agreement, where all of a sudden everyone can get some legal review. It's part of the democratization of this. And so Claudebot, you know, with, you know, also of course, Codex and, you know, Claude Code and all the rest,

• 14:38Speaker 01

  which are the, the, the much stronger capable, you know, instances of this, the ones that, that all the people I know are using is primarily Claude Code and Codex. Obviously there's a bunch of users of Cursor and other things too. But those do create this. And, you know, I have, you know, agents on, you know, two of my computers that have access to the whole computer and are kind of doing things. And, you know, it's part of being part of the future. People are like, aren't you worried it's going to send out an email, you know, on your behalf? And it's like, look, if that's the worst thing, and it will be a little odd for something to happen, that's not a big deal. Right. The bigger deal is if it decides to kind of erase my entire computer or be,

• 15:23Speaker 01

  you know, this is the security question you're asking, is susceptible to prompt injections, which then say, upload your entire computer to, you know, the dark web, you know, et cetera, et cetera, or, you know, do the following things, or operate as a part of a botnet for the Russian or Iranian botnets that are trying to create disinformation within democracies and create, you know, chaos and confusion, or, you know, to, to, to add to your negative brand in specific. And so those kinds of things, like there are, is a whole new world of frontier of security, of reliability, and a bunch of other things here. Matter of fact, maybe we should make a, you know, you know, I hate making predictions, but,

• 16:05Speaker 01

  you know, in addition to, people will start saying fake news, like you could have had the, you know, the Minneapolis, you know, kind of ICE official saying, no, those videos were fake news. They didn't show shooting unarmed, you know, people. They, that's fake news. We will see at some point, someone saying, no, no, I didn't do that thing.

• 16:29Speaker 00

  Right. That was my agent. I didn't post on social media. I didn't buy that thing. It was just my agent run amok.

• 16:35Speaker 01

  Yes, exactly. We will see that complaint sometime this year, whether or not it's true or not.

• 16:41Speaker 00

  Yeah. Well, what do you think it's going to take? So immediately after this happened, our team had a team call, and there was different opinions on our team as to some people were saying, oh, I already downloaded it. Others were like, ah, I'm, I'm nervous about security. Others were like, ah, just buy a Mac mini. It's fine. Set up your own environment so it doesn't have access to the rest of your stuff. Like, what do you think it's going to take for sort of a more mainstream audience to say, hey, I'm comfortable with this and I'm going to give an agent access to, let's say, my email and then maybe even my credit card?

• 17:14Speaker 01

  Well, what people want for mainstream is they want broad reliability. And so like, they'll probably want to hold a higher standard to what they currently have. It's a little bit like autonomous vehicles. Right. Part of the thing that Aurora and Waymo have been navigating, which is, well, we wanted to have zero accidents. And you're like, well, you've got a whole bunch of humans on the road. You can't have zero accidents. You can have less accidents than you had before. And by the way, delaying to getting less accidents, you're costing in, you know, hundreds and thousands of lives. Yep. So you shouldn't delay for that, which is the natural, you know, for whatever reasons, like, no, no, we should wait until it's no accidents. Like, okay, your, your actual thing is costing thousands of lives.

• 17:55Speaker 01

  Well, similarly, today, a lot of people get cyberscammed. They get cyberscammed through, you know, emails, they get cyberscammed through hacks and so forth. So, but, but the, the probable mass consumer demand will be, it's gotta be safer than that. Where the real answer are completely safe. And it's actually, the real answer should just be safer than that. Now, part of the thing is, it'll be so valuable so quickly that I think people will, just like the use of computers and the fact they, and taking, like, people aren't saying, I'm not using email until there's no phishing attacks. I was like, I'm going to use email.

• 18:37Speaker 01

  And some people are going to be vulnerable to phishing attacks and we're going to try to prevent it as much as we can. By the way, I think AI is going to help with that. Like, I think that's where it's going to play out. But I think it'll probably be driven, people will initially go, it's slow then fast, because it'll initially be like, oh my God, it's all in safe. Oh shit, you, you're doing all those cool things and, and really helping your work and your life with it? Ah, I'm going to do it too. Right? And then, you know, we as technologists, as, as, as industrialists, et cetera, need to be trying to do our best to make sure that the, the accident rate, you know, because a lot of criminals try to take advantage of this. You know, a lot of rogue state nations try to take advantage of this. Will actually in fact be, you know, low. I don't think we can make it zero,

• 19:22Speaker 01

  but to try to make it as low as possible.

• 19:24Speaker 00

  Yep. No, absolutely. And I think that sort of relatedly, a lot of people are saying, let's keep tech over here and then let's keep politics over there. And as we've been talking about today, like they're so intertwined. We talked about the layoffs. Are they due to AI? Or are they due to disastrous tariff policies, which is very much, you know, a live political question. And so you recently published an op ed in the San Francisco Standard and you argued that Silicon Valley can't be neutral anymore. Too many tech leaders have sort of tried to stay above politics and said, no, I'm about business. I'm not about politics, or perhaps gone even further and sort of placated the administration. And, you know, I understand when you are, you know, leading a top company in the United States, you want

• 20:07Speaker 00

  to have a good relationship with the administration. But you have said that sort of our institutions are under enough stress that it is, it is time to speak out. We must speak our values and we must sort of stick up for the future of America. So why did you write this piece? Like, what do you want people to take away from it?

• 20:23Speaker 01

  Look, the short answer is, we're living with an administration that is claiming that there's a ton of domestic terrorism. And, you know, my fear is that the reason why they're doing this is to try to justify a bunch of essentially fascist autocratic action against their enemies and opponents, which is, you know, anybody that they care to think is their enemies and opponents, let alone people who actually think that they're trying to hold them accountable, the rule of law. And so, you know, last year, I was, because I do want, you know, any elected president, any elected administration to be as successful as possible for the American people, very, very badly. I was basically

• 21:08Speaker 01

  pretty quiet. It was a little bit of, hey, I wish they would begin, you know, follow the law better. I wish they'd be less cruel. I wish they would show more competence, you know, rather than just, you know, like, hey, look, we're doing all these layoffs in the federal government. You're like, yeah, you're killing lots of kids, you know, and, and, you know, to be better at all of that. But

• 21:30Speaker 01

  Muted and softly because it's like, look, of course, what we want is it is not person one was right or person two was right about the political outcomes or this is the way you should have voted or this is the way you should vote. It's we want the best possible thing for, you know, as Americans for Americans. And then, you know, I tend to think we as Americans also are a little bit like we also care about the world too. And we want the good things for the rest of the world as well, but let's just focus on Americans. So here you have two points, not just one, but two points of people being shot when they posed no violence

• 22:10Speaker 01

  risk to the ICE officers. And you can tell it from the video cameras. And so they were shot, basically murdered because of that. From the video cameras, you can tell various forms of malfeasance, like including in the Renee Good is like, you know, officer, you know, using an epithet, you know, so it's like, oh, this is not a God, I felt so, I felt like it was going to run over me. It's like, no, no, I'm delivering retribution, which is what train like many, many great police officers, great FBI agents

• 22:53Speaker 01

  across the nation have been trained not to do this. It's putting shame on them and all their training to have these, you know, poorly trained, you know, not in control of themselves, people doing murders. And you kind of go, okay, look, enough's enough. I mean, yes, you can see the thousands of assaults that are happening, the terror that's happening, the kind of invasion of blue cities, blue state cities because, oh, it's a sanctuary city, etc. But to do that, that is like, I think fundamentally un-American. And the thing for business leaders is to say, it's fine to, when it's just kind of red versus

• 23:35Speaker 01

  blue, and this person thinks higher tax rate, and that person thinks lower tax rate, or this person thinks regulation for X, or this person thinks that, you know, we should be doing, teaching X in schools or not, which I do think is generally should be separation of insurance, but, you know, Constitution, right? But it's like, look, this is, the domestic terrorism is ICE. The domestic terrorism is them shooting Americans and assaulting Americans. You know, people who have, who are born in this country, who have passports, et cetera. That's an American issue. And I think as business leaders, you should go, no, no, actually, in fact, I'm going to speak out on it to show that I actually have courage, that I care about it.

• 24:20Speaker 01

  And obviously, I was talking mostly within Silicon Valley, but it's like, if you're silent, you're complicit. And you could say, well, but it's not my place. And it's like, well, it's not your place to speak out about, like, not having murders in your country perpetuated? What do you think is your place? You think it's your place when people are being shipped off to camps? Because, you know, making the Nazi thing is like, well, okay, yeah, then. And you're like, well, there's this thing with these ICE detention centers you gotta pay attention to. Like, it's like, look, you know, there's a reason why we have law and due process and that kind of thing, and it's part of the reason why we say, that's what it is to be American.

• 25:01Speaker 01

  And even if you said, but I support all these other good things that the administration's doing, it's like, right, but you're going to be silent about the same things that, in parallel, the Germans were silent about prior to World War II? You're going to be silent about those? And you don't wait until there's gas chambers, right? I mean, that was a relatively late addition in the, you know, kind of Nazi regime. You speak up early to say, no, we correct before we're on the trains in that direction. I was like, okay. Like, if it was just one, you go to, like, one bad officer caught on video camera, handled

• 25:45Speaker 01

  badly, because it should be, yes, we're going to investigate, we're going to make sure this doesn't happen. Then a second followed up by nope, public statements that are denying the truth you can see in the videos.

• 25:57Speaker 00

  Exactly. I mean, I think it'd be one thing if, to your point, it's a bad apple and the administration said, let's investigate immediately. Instead, they said, let's investigate the victims and the families of the victims instead of investigating what happened. And, you know, to your point about people not standing up, a lot of people say, you know, Trump is someone who is vindictive or does retribution. And so it'll, it's bad for my business. But I think one of the things that I'm hopeful about with you speaking up is there is safety in numbers. If everyone speaks up, there can't be revenge against everyone. And so if you're speaking up, then the next person can. It gives more cover to the next person and to

• 26:40Speaker 00

  the next person. Because to your point, we can't just sit back. We have to stand up. Even if you're not standing up for humanity, listen, business and commerce is suffering incredibly in Minneapolis because people aren't leaving their homes. They can't go to work. They can't take their kids to school. So this is certainly a moral and a constitution issue, but it also will affect the future of America and the future of business.

• 27:03Speaker 01

  And let me add, just kind of take a slight tune up. So for people who are thinking about themselves and doing stuff, it's obviously much easier to do once half the people have spoken up.

• 27:17Speaker 00

  Right.

• 27:17Speaker 01

  Right. That doesn't require courage. If you say, okay, I'm no, I don't have any courage. I'm going to wait for that. Fine. But self identify.

• 27:27Speaker 00

  Right.

• 27:28Speaker 01

  Understand that that's what you're doing. Courage is when you speak up, when you're like, ah, I wonder if the other people are going to come speak up with me.

• 27:37Speaker 00

  Yep.

• 27:38Speaker 01

  That's what courage is. And so that was part of the reason why to write the SF standard, you know, to, to, to be out there. And, you know, I, I anticipate a ton of political attacks because of it.

• 27:53Speaker 00

  Absolutely. Well, amen. Proud to work with you on this one, Reid. Thank you so much.

• 27:58Speaker 01

  Possible is produced by Palette Media. It's hosted by Ari Finger and me, Reid Hoffman. Our showrunner is Sean Young. Possible is produced by Tenasi Delos, Katie Sanders, Spencer Strasmore, Imo Zoo, Trent Barboza, and Tafadzwa Nirmurundwe.

• 28:13Speaker 00

  Special thanks to Surya, Yalimanchili, Sayida Sabieva, Ian Alice, Greg Beato, Parth Patel, and Ben Ralas.