Latest / Best of Business / Sam Dickie: Fisher Funds expert on Microsoft cutting over 4,000 jobs as a result of AI

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Sam Dickie: Fisher Funds expert on Microsoft cutting over 4,000 jobs as a result of AI · Best of Business

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  Speaker 2: and pick just picked up the trash on the ground.
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  Speaker 2: so strange, you don't know, might have been just the
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  Speaker 2: bum down the road who touched that straw, and now
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  Speaker 2: you own it and you paid for it more Full
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  Speaker 2: view twenty three away from seven. Microsoft, as we were
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  Speaker 2: discussing earlier this week, is just cut almost five thousand
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  Speaker 2: jobs and reckons AI is changing how work gets done.
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  Speaker 3: Sam Dickey from Fisher Funds is with us. Hello Sam, Hey, Yeah.
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  Speaker 4: There was just chuckling about your Tata Swift story. There.
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  Speaker 3: Have you ever paid ranging that done? No? No, I
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  Speaker 3: don't think I that.
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  Speaker 2: I've actually I ripped a poster off a wall once
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  Speaker 2: at a gig. It was Tim Finn's gig. I was
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  Speaker 2: about seventeen years old. That's probably the dumbest thing I've done.
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  Speaker 4: You didn't pay for it, though.
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  Speaker 3: No, that's right. I did pay to go to the
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  Speaker 3: concert though, so more for me anyway.
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  Speaker 2: Now Microsoft, some people are saying Microsoft are blaming it
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  Speaker 2: on Ai.
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  Speaker 3: Is AI really taking the jobs here?
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  Speaker 4: Yeah? They were adding around ten thousand people a year
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  Speaker 4: for thirteen years and then that flatline last year and
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  Speaker 4: now this headline about four thousand, eight hundred job cuts
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  Speaker 4: does feed that AI taking jobs narrative. But most of
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  Speaker 4: those cuts were in the Xbox division, about eighty percent
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  Speaker 4: of them, which was massively bloated with fourteen fourteen layers
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  Speaker 4: of management, and they've been struggling to gets PlayStation and Nintendo,
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  Speaker 4: and some of this was just overdue indigestion from the
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  Speaker 4: post COVID overhiring that a lot of tech companies that did.
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  Speaker 4: The real story, I think is this capex cannibalization. So
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  Speaker 4: we know that, you know, big techs being mudding in
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  Speaker 4: the waters by spending massive capecks as we've talked about
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  Speaker 4: many times, and they have to fund it from somewhere
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  Speaker 4: that the market's running out of patients and sadly people
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  Speaker 4: are the easiest cost savings. But bigger picture, I think
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  Speaker 4: most long term forecast suggests AI creates more jobs than
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  Speaker 4: it destroys.
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  Speaker 3: Oh really, how explained to me?
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  Speaker 4: Well, the type of jobs are AI engineers, machine learning specialist,
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  Speaker 4: data scientists, AI infrastructure engineers. None of those jobs existed,
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  Speaker 4: by the way when I left university, Heather, But there
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  Speaker 4: is chatter about a wage gap developing. So it's sort
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  Speaker 4: of a two tiered wage structure. So the skilled AI
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  Speaker 4: practitioners they command premium salaries while everyone else stagnates, which
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  Speaker 4: is some of the beers more barist people are saying
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  Speaker 4: that's inequality on steroids. But I think history shows that education, retraining,
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  Speaker 4: and labor markets adapt quickly, so we will see there.
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  Speaker 2: So the companies that have automated, are they getting more
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  Speaker 2: efficient though?
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  Speaker 4: That's actually super interesting. So AI is definitely making companies
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  Speaker 4: more productive bus but the biggest efficiency gains that have
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  Speaker 4: been proven to be coming from combining AI with human expertise,
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  Speaker 4: not replacing people entirely. And in fact, Forester and Gardner
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  Speaker 4: too big tech research firms reckon. Many firms regret cutting
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  Speaker 4: people to fund AI because these firms are losing institutional
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  Speaker 4: knowledge that's nearly impossible to rebuild. And in fact they
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  Speaker 4: think twenty twenty seven will be the crunch year where
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  Speaker 4: firms will be forced to quietly rehire up to half
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  Speaker 4: half of the AI attributed layoffs because operational systems are degrading,
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  Speaker 4: which would be a super painful u turn for management teams.
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  Speaker 3: Okay, what does this mean for investors?
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  Speaker 4: Well, remember our chat last week, This bigger picture, this
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  Speaker 4: is not about filling that sorry, this is not about
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  Speaker 4: stealing jobs. This is about filling looming labor shortages. So
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  Speaker 4: three hundred million working age population shrinkage over the next
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  Speaker 4: twenty five years. But I do think the real winners
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  Speaker 4: might be companies that have kept their experience management teams
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  Speaker 4: kept their cultures intact and are improving their performance with AI,
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  Speaker 4: so they'll have institutional knowledge, team morale, and the ability
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  Speaker 4: to deploy AI without the chaos of losing key people.
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  Speaker 3: Yeah, a very good.
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  Speaker 2: Point that you make, Sam. Thank you very much appreciated,
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  Speaker 2: Sam Dickey for your funds. Enjoy your long weekend.
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