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Good morning. AI may not lead to massive job losses, but it's still changing what it means to be a company. The great challenge facing leaders of all organizations is to understand what those AI-driven changes entail for their markets and operating environments.
Jack Dorsey, the CEO of Block, made that assessment in a letter to shareholders Thursday explaining why the parent of Square and Cash App will cut 40% of its workforce, or more than 4,000 jobs. Dorsey, who co-founded Twitter as well as Block, cited rapid advances in AI tools reshaping how companies operate. “The core thesis is simple,” wrote Dorsey in his note. “Intelligence tools have changed what it means to build and run a company.”
Block isn’t alone. Salesforce cut about 4,000 customer-support roles last year citing AI gains. Pinterest is shedding nearly 15% of staff to refocus on AI initiatives.
Such job cuts are only one aspect of what it means for a company to adapt to AI. The question isn’t simply a matter of cutting costs or doing more with less, although there will be more instances where that happens. The big questions are how AI changes the way leaders understand their customers, their products and services and the way their organizations are structured.
Even if AI doesn’t lead to mass layoffs, it may lead to the loss of jobs in the C-suite. That’s the case at Amazon.com, where insider Peter DeSantis took over late last year as head of AI. Today, the Journal takes a look at where he taking the company:
In December, Amazon said its chief AI scientist, Rohit Prasad, would leave the company and his responsibilities would be handed over to DeSantis, a widely respected nearly 28-year veteran who spearheaded cloud computing and silicon chip-making operations, among other accomplishments.
His strategy “is less about shipping new bleeding-edge AI models every few months, as OpenAI and Anthropic have been doing, than about giving customers more cost-effective ways to meet their AI needs while keeping their technology up-to-date,” the Journal says.
That direction is rooted in customers and the business, and figuring out how technology helps the company move along its particular path. As consultant Tim Crawford told the Journal: “Some CIOs are asking “ ‘what’s the outcome and what’s the price I’m paying for that?’ Because it’s more about value.”
Even successful tech companies of relatively recent vintage find it necessary to remake their leadership and operating models in the face of AI. The task for companies outside the core of the tech sector is certainly just as urgent.
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