EP5: Tech Layoffs: AI's role or just the tip of the iceberg with Dave Sobel

Discover the hidden truths behind tech industry layoffs and remote work dynamics as we join IT guru Dave Sobel on a journey through the latest market shifts. Unpacking the layers beneath these corporate strategies reveals not just a quest for profitability but a complex interplay of management decisions in response to a post-pandemic world. Sobel’s sharp analysis illuminates the evolving landscape where traditional office policies collide with the growing appetite for flexible work arrangements, shaping how companies and employees chart their future courses.

Venturing into the realm of artificial intelligence, we confront the transformative effects on the job market, insisting on AI's role as an ally to human brilliance rather than a replacement. We examine the ethical conundrums that surface as AI becomes more pervasive, advocating for a regulatory balance that can nurture innovation while protecting societal interests. This episode is an enlightening exploration of how we can harness AI's potential responsibly, ensuring it serves as a force for good amid the small businesses and tech giants alike. Join us for a compelling dialogue that stitches together the complex fabric of artificial intelligence, from ethical frameworks to its real-world impact on healthcare and beyond.

Dave Sobel
https://www.davesobel.com/

https://twitter.com/djdaveet?lang=en

Chapters

• 0:05 Tech Industry Shifts and Remote Work
• 15:21 Impact of AI on Job Market
• 21:54 Ethical Frameworks for AI Regulation

Transcript

Speaker 1: 0:05

Welcome to Tech Travels hosted by the seasoned tech enthusiast and industry expert, steve Woodard. With over 25 years of experience and a track record of collaborating with the brightest minds in technology, steve is your seasoned guide through the ever-evolving world of innovation. Join us as we embark on an insightful journey, exploring the past, present and future of tech under Steve's expert guidance.

Speaker 2: 0:33

Welcome back, fellow travelers, to another exciting episode of Tech Travels. Today we're thrilled to have host Dave Sobel with us, who is a prominent figure in the tech industry and he's the brilliant mind behind the Business of Tech podcast. Dave is renowned for his insightful commentary and his deep dives into the IT services space and offering a very unique perspective on why we should care about the latest industry news, and through his YouTube channel, msp Radio, he provides invaluable content that's focused on IT service providers that enriches the community with his expertise.

Speaker 2: 1:09

Also as a consultant and creator, he's passionately supported by his Patreon community. Dave's work continues to influence and shape the IT services industry. So with that, Dave welcome, and thank you for sharing your time with us.

Speaker 3: 1:21

Steve, thanks for having me. I'm super excited to chat with you.

Speaker 2: 1:25

It's really great to have you here, especially at a time when the tech industry is at a crossroad. In recent months, the headlines have been dominated by widespread layoffs and tech, with over 450,000 positions affected and just 38,000 this year alone. It seems like this shift was sparked by a surge in entrepreneurship. Many see control and changing their own lives, and many of them started their own ventures. But with automation and AI reshaping the landscape, there's talk of even greater changes by 2030. That's really going to impact millions and, given your expertise, we're really eager to unpack these dynamics here today. So how do you, as a professional, see this and pivoting to a new era?

Speaker 3: 2:12

Well, there's a lot to unpack there. So let's, let's try and break a couple of those pieces out. So oftentimes the tech layoff story is big tech, right, it's a small collection of companies that are laying off large numbers of people. You know several hundred a time, thousand at a time. Let me observe just broadly that they're all geniuses when the markets are going up and it's all market conditions when things are going down. They overhired, they made a bad call, they mismanaged their staffing and they're cutting back. That's the headline. That is the headline let's just call it out there.

Speaker 3: 2:49

If they made the right calls on that, they wouldn't do that. And last I checked, they're all doing really great profitability wise. So if they wanted to, for the long term they could keep those people. Now I think they got a little over confident, they got a little fat, they got a little lazy and they're trimming up to make profits better. But I don't think that's a statement on the viability of tech. I don't think it's a statement on the market. I think it's a statement more on their management and their willingness to and drive for profit. It's not a bad thing, it's a statement of fact. So, as I said, the geniuses when it all is going well, aren't they?

Speaker 2: 3:28

Yeah, certainly, Dave. Your point about management's decisions in contrast to market conditions. It's well taken. But reflecting on the recent shifts, could it be seen as a kind of recalibration from the pandemic era? There was a surge in hiring pre-pandemic across tech, and then that was then a rapid shift to remote work. I think now we're starting to observe the real pullback, maybe perhaps even a little bit of resistance after companies reconsider in office work. So with all that, do you think there's connection between the operational pivot and the workforce reductions that we're witnessing?

Speaker 3: 4:08

A little bit, but let's observe that there actually was a massive hiring during COVID of by the tech companies. There was a lot of hiring and then COVID hits and most of the large tech companies hired a lot more. They actually anticipated much more aggressive growth to continue beyond the pandemic than actually played out. That's the important miss call. I think the relation that what you know, the conversion to lots of remote work made perfect sense because in that environment they had to do it, and what we found and we're finding more as the research is coming out, is that actually had little impact on productivity, except in the cases where it made productivity better. Now there are some some details of that that are worth unpacking, where you do need to make sure that you're investing in career trajectories for younger people. There are some mentorship benefits of bringing people together on a regular basis, but it isn't necessarily directly correlated to you must be in the office five days a week. I'm going to observe most of these organizations are also have real estate leases that they're required to continue to pay and they don't like wasting resources, so perhaps some of this is related to the fact that they own buildings that they want people using. The other thing about it is is it's a real easy way to have people opt out themselves and not have to lay them off by saying, well, we're enforcing return to office, you must come back in. Some people will select not to do that and that's an easier way to have them quit themselves, then force them out the door, and that is a difference from an employment perspective.

Speaker 3: 5:44

There's not a lot of data and research going behind this. There's lots of touchy feely like oh, we think it's better being in the office. That's not data driven. There's, in fact, you know, companies like Amazon who have looked at that and had pushed back from their employees saying we're a very data driven company and you're not actually giving us data on why this is true and funny. They're not actually following through on pushing back with management data. They're just saying, well, this is the way it's going to be. I'm going to say it's convenient of a way of doing it and I'm going to kind of call BS on that. They're not the only ones. I'm just going to say that if you're actually driving from a data perspective, that's not the case. Now, I don't want to be a total bummer here. There are a ton of companies that are actually leaning into this as an opportunity and saying we're going to be really good at managing people, at managing remote work, and we're going to make it a competitive advantage and it kind of favors the small right now.

Speaker 2: 6:41

Yeah, Dave, you've highlighted a key trend. I mean, the pivot towards managing remote work is not just a necessity but it's also a strategic advantage. So, considering this shift, what practices are you seeing these forward thinking companies adopt? And I'm thinking kind of beyond practical measures like, how are they navigating the cultural transition and centralized workplace to more of a distributed one? I mean, essentially, what's the blueprint for the new management ethos? I mean, that seems to be the favored kind of agile or adaptable approach.

Speaker 3: 7:15

So it seems I'm going to push back a little bit to say I'm not necessarily convinced that it's a new way of managing. What I'm actually saying is that it requires good management. It is easier to be a bad manager when your staff is physically around and you can get away with a lot. The scenes from the office space with Bill Lumberg walking around the office with his coffee cup are still true and still funny, because bad management can get away with it when they're all physically together. You can't get away with bad management when your team is dispersed and that lazy management of just walking around the office doesn't work. You have to be much more disciplined about it. It is a skill to be a good manager and it is additionally a skill to be a good remote manager. Now again, those that lean into that and learn those skills, both individually and as an organization, are able to really succeed. But let's not sugarcoat it. It's kind of covering up some bad management.

Speaker 2: 8:18

Yeah, certainly, dave. I think there's definitely a lot of merit in what you're saying about the demands of good management, especially remotely. But the old way of thinking was, hey, the traditional office, setting everyone's in the office. There's all the tangible synergy that you can use to accelerate innovation and continue that innovation around an idea development. But despite my own experience of being fully transparent, my own experience of being remote for the last seven years, I have seen reports that suggest both challenges and benefits of remote work regarding collaboration and innovation. But from your perspective, is there compelling data or insights that either support or challenge the notion that remote work may hinder the collaboration and creativity within innovation?

Speaker 3: 9:07

Yeah, I mean. There's data coming out about this where I mean nothing is perfect, by the way, you know. It's not that the answer is everyone must be in the office or that it all falls apart when it's when it goes to remote work. It's about deliberate investment. I'm not one that sits, as I'm a fellow remote worker. I've been working remotely for a very long time and I'm not one who sits around and says you never have to go into the office, you never have to bring people together. That's not true.

Speaker 3: 9:33

There are certain types of work that make sense to bring people together. There's other kinds of work that is not required of that, and let's focus instead on outcomes and results rather than time. Everybody that talks to me and says their hybrid work strategy is three days in, two days out, I smile and go. You don't actually understand what hybrid work is, do you Like? It's about doing the right thing in the right place at the right time. There's also an investment a lack of investment in asynchronous work, the fact that you don't necessarily have to have everyone together all the time in order for things to happen. You can build asynchronous teams, and anybody who's worked across time zones gets this the idea that you know if you're going to collaborate with your colleagues in Europe or Australia, or you know in India or you know in South Africa like you're going to need to find ways where time is not the barrier. This is applying that broadly to the organization.

Speaker 2: 10:40

Yeah, absolutely. I mean, the concept of working across time zones is something that I've really been immersed in as well. I mean it often means unconventional hours, but it's part of a broader digital shift. But would you say that the pandemic has accelerated a digital transformation where, hey, we're embracing AI and we're adapting to these new work patterns to really become really essential? And maybe, I guess, maybe do you see these changes as a response to the pandemic kind of evolving, the rapid pace of technical advancements? Again, I'm using the word digital transformation.

Speaker 3: 11:17

Well, you brought up digital transformation. So I have to be the one to smile about it, because digital transformation is funny to me, because I kind of don't believe in it. In that, I think it's kind of garbage. What it actually is a nice way of being is consultants speak for. Well, you kind of fell behind on your investments in technology and so we must catch you up.

Speaker 3: 11:39

And instead of saying that, it sounds much better to say we must digitally transform you. And if you actually dig into the specifics of it, it's always about applying process to take, you know, a previous system and move it more into digitalization. Well, by the way, you should be doing that all the time Anybody who runs a business so you should be continually investing in it and investing in new technologies, new techniques. And if you're constantly doing it, you are always undergoing a transformation process. You just don't have to call it out as we are undergoing digital transformation. It's a nice way of saying you fell behind, and so, from my perspective, you should always be looking at investing in your organization and make sure that you're driving the latest use of technology that makes sense. You bring up the AI stuff. It's like yeah, of course there's new stuff to hear and we need to be considering it and integrating it into our workflows that make sense. But this is just the next thing that we're doing. There will be something else beyond that, because there were plenty of them before.

Speaker 3: 12:43

I can predict accurately that there will be yet another technology down the road that impacts the way we do business. There is one right, and so if you know there's always one, there's always something you should continually be in a process of evaluating, considering and integrating, and if you constantly practice that, you get really good at it, like businesses get really good at doing that. Knowing it's a thing. Too many businesses just always assume that well, we've done it and now everything will stay the same forever. Has anybody actually ever been in that world where everything stays the same forever? That's not reality, and but we're oftentimes kind of. We like to think it is like, oh, we're done, now we've digitally transformed and you're not expecting something else to change on the ground. Because I am.

Speaker 2: 13:41

Yeah, I'm interested, you know, thinking about this, you know, future of leadership. I saw this course the other day was the future of leadership in a digitally transformed world and it was around. How you know, CEOs and C-Sweets can really start to kind of blend a new form of a mental model of leadership. That really kind of gives them a quote unquote post-digital transformation world mindset Interesting, How's the best?

Speaker 3: 14:05

soup. Wow, some consultant did really well coming up with that one, because I started smiling up. Aren't you constantly evolving? Aren't you constantly learning? Aren't there new techniques and ways of doing it? And, by the way, don't people change? And don't we, as society, get smarter? Like don't we? You know we continually evolve and we need to recognize that. You know, I'll give you like I'll go a little bit on attention. Like I get really upset when I get we push back on. Like, oh, the millennials, the Gen Zs, it's like, yeah, guys, we taught them this, we gave them better ideas and now they're implementing it. That's called progress. Like they think differently because they learn from our lessons and we taught them to think differently. This is a good thing. It's the investment we made in getting better, because the world continually changes and gets better.

Speaker 2: 15:02

I want to double click on that real quick. Can you give an example of when you say we kind of taught the millennials or the younger generations? Is it? We gave them the tools like you know in the internet laptops, pcs, tablets. I mean, is that that we talking about Like? Give me an example.

Speaker 3: 15:16

It's all of that Like. It's interesting to me that we always talk about the fact that you know we push back. Oh, millennials and Gen Z don't know necessarily how to communicate the same way. Well, yeah, we gave them different tools. We gave them new tools that communicate differently, and they have mastered those skills and thus they do talk a little differently than someone who's been in the marketplace for, you know, 30 years or such like that, because they have learned on different tools.

Speaker 3: 15:44

You and I were talking initially beforehand about typewriters. Right, like you're into typewriters, like the youth today which is a fun way of saying it would look very funny at us and say, like, well, what's that for? It's not connected to anything, it doesn't result in the same output. I have to do more to it, and they will look at it and say like that is not a native tool to them, whereas the tools that they've given us short form video, the ability to communicate instantly with people in real time, the ability to quickly process data, to have data available to them all the time that's inherent into the way that they do business. We gave them those tools, we taught them those techniques from day one and we didn't have to teach them the before times, you know in terms of learning it. Now they're able to do that stuff very effectively. That's a benefit in my mind.

Speaker 2: 16:33

Yeah, and I want to kind of dovetail back to that. First, you know, opening part, where I mentioned, you know there's that automation, ai are significant factors and they're predicting 12 million jobs are going to be affected by 2030. And I kind of look at that and kind of say, well, that's kind of a good thing, because I look at it and say, look, I think the consensus is that I as a tool is not so much as replacement, is the idea that I should really be used as a tool that we can use to augment Human capabilities and verses replacing them. I think that's, you know people look at it is a wallet. I it's gonna replace my job, I'm gonna be out of job. I think there's gonna be kind of an ebb and flow is how the market Change, how the technology changes to create new ways of working, and I think people who know I really well Will have very easy ways to find opportunities within the job market totally.

Speaker 3: 17:21

You're not gonna be replaced by a, you're gonna be replaced by somebody who understands I. But, by the way, this is not new either. Like if I recently just covered on my show, I do a segments on friday school, the friday big ideas right, where I'm trying to tackle stuff that doesn't fit into a new story. One of them was a was a book review on.

Speaker 3: 17:38

Author actually did a deep dive all the way back into technology, stating back to the fourteenth century in terms of the introduction of new technologies like the printing press and the production line and such like that. We've been here before in terms of the scare of oh, it's gonna disrupt all jobs. Yeah, it did. You know what it also did? Created all kinds of new jobs, like all kinds of new capabilities were possible because of these innovations were not wired necessarily to love change, as we've Talked about, but this is one of those areas where we can't necessarily see all of the things that are going to come from that, but they are there and we have seen this pattern before. You're gonna be. You need to embrace it. You need to recognize that this is an area where you need to learn the technologies in order to find your next spot in the new version of this economy, but this cycle is something that we've seen over and over and over again. By the way, we should learn the lessons from the previous iterations.

Speaker 2: 18:38

It's incredible to see what's happening with the. I think I think they're saying that I globally is gonna be To two and a half times higher than it was in twenty seventeen, but it's levels off over the past five years. But the investment that's going into everything I related. Now I think Google was doing a keynote speech and they mentioned the word AI two hundred times in less than a one hour speech and it seems like we're almost overwashed with everything I write.

Speaker 3: 19:02

All right we're right in the hype cycle. By the way, don't don't be, don't miss out on the fact that there's a lot of investment dollars searching for homes. So companies are sending signals that they are AI companies in order to look for investment dollars or to be part of that. So we need to separate out the hype from the implementation. I constantly am looking for really good use cases. You know, where is it actually making a difference?

Speaker 3: 19:24

There's some really cool research in terms of medical applications like, for example, they've been testing the use of AI in emergency rooms and what the one the. The piece that I found absolutely fascinating was they were putting generative AI in the hands of doctors in an emergency room and using it to input symptoms and find out what the generative AI recommended. In ninety three percent of times that they ran this, the actual diagnosis was in the top five things generated by the generative AI by just putting in the symptoms. That's an incredibly powerful tool that we can give to doctors Now. It augments them, it does not replace them. That's a very, very key bit. But you've got to. You know, a patient comes in, you're able to run the symptoms, the computer assistant gives you five possible scenarios and in 93% of the cases you've got, one of them is in that top five. That's fantastic. That's exactly what we're looking for transformative.

Speaker 2: 20:27

Yeah, I definitely agree that the healthcare example is a huge one where you get predictive and prescriptive type of care, you get the ability for doctors to be able to quickly, faster diagnose the patients. And then you think about the amount of data that probably you say a person comes in and they probably have certain conditions, they have certain prescriptions that are probably tagged to them and you know, you think across all of this you're trying to find a needle in the haystack. It is too much for one person to try to sift through in a very short amount of time. Right, the patient could be in an emergency state where you need to act quickly before you can operate.

Speaker 3: 21:02

Mm-hmm right, and so you have to have that information. And, by the way, medicine is a great area to look at. It's constantly changing, there's new studies, there's new information, there's new drugs out there. Like this is a way of empowering doctors to give them all kinds of information, and you can apply that in multiple industries. I'm super excited about what's possible here. Now, the first one also then say is like we have to be really thoughtful about the way we're thinking about its impact, right, data privacy, data protection, making sure that we're not dealing with too much hallucinations. We don't want to let just let the AIs run everything. But, by the way, that's not looking like that's the most effective use. The most effective use is distinctly an augmentation. I want to point out we're going to disrupt a lot of jobs Totally are, but we're also going to create new ones, and we've seen this again the historical pattern over and, over and over again that it creates new opportunities too.

Speaker 2: 21:54

You mentioned the whole thing around data privacy and kind of. It brings to me kind of this whole thing around kind of governance and framework around transparency, around AI, right. So Google announced this week that they were going to create a sub entity where they were going to allow them to kind of build an ethical framework for which they would then apply against Google's AI, and I kind of thought for a second, you know, hey, that's great, but do we really believe that kind of having you govern your own type of AI is the right choice? Or do we see some sort of kind of like outside tech, outside of a specific company, the kind of an industry wide type of framework where everyone applies the same framework? Because I look around and there's multiple AI frameworks, there's multiple type of ethical frameworks Doesn't seem like everyone's kind of following the same one. Where do you start to see this conversation going? Is it kind of more we'll let them govern themselves, or we need a bigger audience to be able to have transparency into this?

Speaker 3: 22:54

Oh, we need regulation. I mean, we need like regulation. When we talk about a societal framework that's called laws, we have a system for that. Like that's the way that's supposed to go. You know, I do not bemoan any corporation doing exactly what they are built to do, and it's maximize profit. That's what they do. They're organized, they are really good at it. They are designed to build a mechanism that brings prosperity to its employees and to the investors and all of that stuff. And that is the point of the system. And the rest of us, if we want to have cross company frameworks, those are called regulations, everybody.

Speaker 3: 23:32

This is kind of a little simple and I kind of laugh and go like we've made politics an evil discussion because we polarized so much of it. But in the framework is there I use a really simple example to talk about this all the time. Steve, I think we can generally agree that both you and I would like to have water that doesn't cause fish to have three eyes and like kills us in our sleep, right, we'd like to have drinking water that's clean.

Speaker 2: 23:58

I agree with that.

Speaker 3: 23:59

Okay, right Now, if you and I go into the chemical processing plant business, the best way for us to get rid of our waste is build our factory next to a river and dump it in by far the cheapest way to make the problem go away. Right, like just is.

Speaker 1: 24:15

Yeah.

Speaker 3: 24:16

If you're pure capitalists. Well, society has decided that we don't really want three-eyed fish to come out of that stream, that we would like to have a process where the companies can't necessarily do that. That's called regulation. Now, by the way, we can have super intelligent conversations with experts about what the definition of clean water is. I think we can say that I'd like experts to figure that out. There's some variability there. I don't know that industry. I don't know if you do.

Speaker 2: 24:49

Well, the thing that I've always experienced is that, you know, as I have spoken to numerous experts who are technology experts, people who really work very, very in the technology industry, and they're all kind of crying for the same thing is that they're saying listen, you know, there needs to be regulatory body, there needs to be a governing body, there needs to be a framework and it needs to be kind of passed at the government level. I think Sam Altman was saying the same thing as well is that there needs to be some sort of license, that the government needs to regulate, that, once a company gets to a certain size and scale with a certain type of AI entity, is that they need to obtain a license from the government. What's your take on that?

Speaker 3: 25:30

I mean, I mean I'll even push back and go like I don't necessarily think it's size and scale, I think we actually need some regulations around IT. I mean I sort of smile. I deal with a lot of small and mid-sized customers when I talk to my audience. Like, if you think about most of technology, it's small companies implementing technology for other small companies. We always love to talk about the big companies because they're exciting and they're newsworthy, but most of the American economy is driven by small business Just is Like that's the reality of it.

Speaker 3: 26:00

The guy that cuts my hair is more regulated than the guy that manages my network and data protection as a small business. That should frighten everybody, yeah, absolutely frighten you. Like you've got to be licensed at some level to be a doctor, but you've also got to be licensed to be a lawyer, to be an accountant, to deliver all kinds of business services. But IT and technology, oh no, we can't possibly regulate those guys. What, like what? This just seems a little off to me. Like this just and, by the way, I've been in this business for 25 years. I ran a managed services provider. It was easier for me to start that than start a barbershop. That kind of feels off to me and I laugh about it because I want to point out kind of the absurdity of saying, oh well, technology is completely different, we can't possibly be regulated.

Speaker 2: 26:58

No, it seems like every single time, you know there's Congress polls, the tech executives in front of Congress or Senate or whatever, and you kind of look and you say they really are really struggling with kind of the basics of how technology works. I think they're kind of like probing, these tech CEOs, and they're kind of like they're almost like continuously questioning, like they're struggling to understand. I don't know if we've got a real strong grasp of people who are advising the people in government of how the tech works and I think that they're really struggling to kind of catch up. Right, you have social media. You've got now you've got Web3, you've got Metaverse, you've got AI and it's now. You've got all of these different layers of technology that are going to kind of be widely adopted and people are going to say, well, where is the regulation around? You know how people are going to basically be dealing within a virtual world. What about when people are dealing with AI entities?

Speaker 2: 27:57

I was a scam. I was scammed because of an AI. Who's at fault for that right? So that I agree that there needs to be a framework. I guess the question is is how are we going to kind of push this to a point where there is consensus between government or tech companies, or is it just governments just going to wake up one day?

Speaker 3: 28:13

Well, I want to point something out on this Is I really want you to think about? You brought that up right, those tech hearings and you've got big tech CEOs sitting on one side and you have lawmakers on the other and you have lawmakers talking about all the things that are going wrong. Who's in charge of writing the regulations to make that stuff not happen? Last I checked, it's not the tech CEOs. It isn't. So if we're going to point somebody out as failing, it's the regulator side, the lawmaker side, for failing. It's their job, not the tech CEOs job, to write that. And I want to push back a little bit on another thought. We have tons of really talented people that work in government thinking about this. Public services is an honorable profession and we really want to celebrate the people that have invested in that. There's some really smart people in there, but it's lawmakers jobs to fix this problem. And if they're not doing a good job about it, society guys like you and me and all of the people around we should change who those people are 100% agree.

Speaker 2: 29:20

100% agree. Wow, dave, that was amazing. So, as we, I want to thank you for that. That's definitely quite a lot. I want to thank you. Thank you so much as we reach the end of our exploration into our digital evolving world. I want to thank you, dave, for the wealth of insights and your forward thinking perspective that you shared with us today, and your expertise has shed light on the nuances of leading us through the charge, on how we're going to navigate this future of technology and business. Appreciate you so much for coming on the show.

Speaker 3: 29:52

Oh, thanks for having me, Steve. This has been great fun.

Speaker 2: 29:55

Awesome. The shows are posted and if you want to share this show with your friends, please share on your preferred social media platform. I would love your help to help bring awareness to this channel. You can follow me on Twitter at the Tech Channel. Until next time, stay curious, stay informed. Most importantly, happy travels.