Your Portfolio Is Powered by Layoffs Now
AI is forcing investors to notice what they’ve always preferred to ignore.
Look, the basic goal of a public company is to take a pile of money, do some stuff with it, and turn it into a larger pile of money.
One way to do this is to sell more Things. But that is hard because it requires finding customers who want your Things. The easier way is to just spend less money making those Things.
If a public company says, “We have found a way to save $80 million per year,” that is considered good. Maybe the stock price goes up and everyone sends each other congratulatory emails that say things like “nice execution” and “strong discipline.”
This is all very normal. Shareholders love savings. Especially from boring, abstract places, like renegotiating cloud contracts or switching from La Croix to tap water or cancelling the company pickleball league.
But sometimes you save the money by firing humans.
Usually, companies use a specific cursed dialect of Corporate English to obscure this. They talk about “headcount efficiencies” or “macro headwinds,” framing layoffs as a weather event that sadly struck the office rather than a choice they made. This language is designed to 1) annoy me, and 2) allow shareholders to enjoy the $80 million without thinking too hard about the people who can no longer afford their mortgage.
And then there is Angi Inc. ($ANGI).
Last week, ANGI basically said:
we fired people because AI made them unnecessary, and we’re saving $80 million a year because of it.
This announcement hit harder than most. ‘We replaced people with machines’ forced shareholders to awkwardly confront capitalism in a way that “macroeconomic headwinds” does not.
ANGI’s move was a product decision. Someone bought AI. Someone ran a pilot and said, “Yeah, this works, we can fire Dave.”
As a proponent of plain-language disclosures, I applaud the bluntness. But it puts shareholders in a weird spot.
On one hand, deleting 350 salaries is an excellent way to maximize profits. On the other, shareholders hate feeling like villains. They want the "efficiency," but they want it wrapped in an abstract narrative about "global synergies."
So now companies are in a strange PR position where they have to explain that the layoffs are, actually, good news, and very cool for profits, and also totally aligned with long-term growth, and also we deeply value our people, many of whom we just fired.
Which is not an easy narrative to land.
Because in pure finance terms, $80 million in savings is extremely bullish.
Cutting hundreds of high-salary roles and replacing them with cheaper robots is the dream scenario for shareholder returns.
And we are going to keep doing this. A lot.
Not because companies are evil, but because companies are really good at doing things that make them more profitable.
And investors are incapable of not rewarding that behaviour.
But culturally, we have not quite figured out how to emotionally process the idea that “great quarter” and “hundreds of people lost their jobs to machines” can now be the same sentence.
What now? Well, we’ll spend a few quarters wringing our hands about the ethics of AI-related unemployment, while simultaneously bidding up the companies that are best at it.
This is how economic revolutions usually happen. When cars replaced horses, no one held a press conference to apologize to the stable hands. The new system was cheaper, faster, and scaled better—so it won.
Anyway, congrats on the profits.
Sorry about the humans.