ChatGPT can reap what Zoom sowed some time ago
In April 2020, around half the world was on lockdown due to the coronavirus, and video streaming website Vimeo struggled with “unprecedented” demand, channeling investment into customer support and technical infrastructure, as well as hosting virtual lunches for its new hires. Three years later, the company’s revenue is falling, its stock price has plunged 93% since the company went public, and layoffs are underway. Vimeo isn’t the only one, writes Lionel Loren for Bloomberg.
Since October, more than 500,000 job cuts have been announced worldwide, dominated by white-collar companies such as Vimeo. What started as a wave of layoffs among tech giants is spreading. Consulting firms such as McKinsey and KPMG take the same approach. Giants like FedEx and Boeing are parting ways with their middle management and “bureaucracy”, and banks like Credit Suisse Group are now a thing of the past.
One might say that this is life in a normal economy. With everything returning to pre-pandemic reality, from hours spent watching online video to company acquisitions to interest rates, it’s hardly surprising that companies are trying to restructure. Recently, Vimeo CEO Anjali Sood commented to Forbes that the company now wants to focus on enterprise customers.
But that’s in stark contrast to the demand for blue-collar jobs (manual workers), where a dwindling supply of older workers is keeping the labor market tight. And that’s certainly the opposite of what might have been expected in the Zoom era, when, equipped with headsets and keyboards, elites who could work remotely were set to leave the less digitally literate in the background. What’s happening right now is a white-collar “recession” – unemployment rates for US professionals are still in the low single digits, but Zoom-ocrats now seem to be first in line when the ax turns.
The question now is whether this is a temporary phenomenon or something that will stick around for the long term. Full recession can distribute the pain more evenly. However, given the disappointing recent performance trends and where automation trends are headed in the ChatGPT era, there’s a real chance this is just the beginning.
While there has undoubtedly been a life-saving shift to digital and remote work during Covid-19, productivity trends have returned to or slightly below pre-pandemic levels, according to a November paper co-authored by Stanford University’s Nicholas Blum.
