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AI-Washing Layoffs, Budget Reallocation, and the Valuation Multiple Trap
When major tech firms announce massive workforce reductions while simultaneously pouring billions into AI infrastructure, PE board members and Operating Partners are left asking: Are these layoffs driven by true AI productivity gains, or are companies simply reallocating budget to pay for AI CapEx? In Episode 21 Paul and Dave apply an economic lens to AI-era labor market disruptions.
They deconstruct the mechanics of corporate layoffs—contrasting direct labor substitution against budget-shifting ("machete-style" cuts to fund AI infrastructure) and Jevons' Paradox (where demand for specialized…
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