sum things considered v1.0
this week's somewhat connected dots: Recession, AI, Job Loss
11.04.25
Short Notes - Recession Whispers Getting Louder
Many people think that the world owes them a coherent story. At HRExaminer, we hope you’ll think for yourself. This section of the operation is an offering of some lego blocks of thought that we hope you can build on.
This week, the lego blocks cover something like ‘rumors of recession obscured by hyped claims of technology progress.’ Few people in HR lived through a recession or two. The last one was 18 years ago. The one before that was 25.
These links will add to your thinking and understanding of the current economic environment.
AI and HealthCare are currently holding the economy up. (You can take that both ways.) Healthcare is 18% of the economy. Tech is 9%. The 10 fastest growing industries are predominantly Tech oriented. The 10 fastest shrinking industries are largely manufacturing niches.
Although the hype says that jobs are being lost to AI, the reality is different. This looks a lot like recessionary behavior. Recruiters and TA being heavily cut. A surplus of job hunters. Slower hiring cycles. High failure rates in small recruiting companies. Realignment/consolidation of the Recruiting Tech stack.
The Mount Rushmore of AI is , Anthropic, Meta, Amazon, Microsoft, Apple, Google, Oracle, OpenAI (the AMAMAGOO) companies. When they lay off people these days, it’s in order to afford to buy more chips. An NVIDIA chip costs more than a very nice car. Each of the players believe they need trainloads of the things. Layoffs yield cash.
This is particularly interesting when evaluating Amazon layoffs. Those people came from segments of the company that are not profitable. (Did you know that Amazon does not make money on its retail operations?) When you cut people from a marginally profitable but very large business, the only difference will be that customer satisfaction scores will decline. Who cares if the business is not profitable.
It’s been a long time since we saw a real recession. Before the COVID interruption (2 months in 2020), the last recession was between 2007 and 2009. Those 18 months were brutal. They were also almost 20 years ago. That longer than most recruiting careers by at least 15 years. IOW, the vast majority of people in the profession have never seen a recession.
In a recession, the recruiting population numbers plummet. We are seeing the beginnings of a bloodbath in the profession. All it really takes is a slight fumble in the AI/Technology sector. But, it’s a combination of lower demand and this season of radical cost cutting we are entering. But, it’s cyclical, not structural.
Recently, the AMAMAGOOs have been talking about power as the limiting factor in their hyperscaling programs. This interview with Satya Nadella (crashed by Sam Altman) on the occasion of the unveiling of the OpenAI foundation provides an interesting slant. The problem, as they see it, is not a chip shortage but a power supply shortage.