A recent live discussion featuring Gabriel Steinhardt, founder of Blackblot and one of the most seasoned voices in technology product management, cuts through the noise around one of the most consequential trends in the industry: mass tech layoffs. Gabriel Steinhardt’s argument is blunt — AI is not the primary driver. It’s a convenient story. The real causes are structural, financial, and deeply human in the worst sense.
What’s Really Behind the Tech Layoffs? It’s Not What You’ve Been Told.
Here are the ten core points Steinhardt makes:
2. The “disposable workforce” mindset has deep roots. A ruthless management philosophy from the 1980s — prioritizing profit above all else, treating employees as interchangeable cost variables — quietly spread from one iconic American corporation across the entire tech industry over 25 years.
3. Failed bets cost workers their jobs. Billions of dollars lost on failed product ventures and misread markets triggered massive layoffs that had nothing to do with technology displacement and everything to do with executive miscalculation.
4. Payroll arbitrage is the real story. Domestic workers are being laid off and quietly replaced with significantly cheaper foreign labor through visa programs and offshore contracting arrangements — a pattern that directly contradicts the AI displacement narrative.
5. The math exposes the lie. Companies announcing AI-driven layoffs were simultaneously filing for thousands of foreign worker visas. If AI were truly replacing workers, those visa applications would not exist.
6. Contractors are the hidden workforce. Major tech firms now staff anywhere from 38% to over 54% of their workforce through contractors, allowing them to cut and add headcount without the legal, reputational, or financial obligations of full-time employment — and without public disclosure.
7. Layoffs reward executives personally. Stock prices reliably rise after layoff announcements. Since executive compensation is heavily tied to stock performance, leaders have a direct personal financial incentive to cut jobs regardless of operational necessity.
8. Hire-and-fire cycles are nothing new. The periodic elimination of mid-management layers and senior contributors has been a standard feature of the tech industry since the early 1990s. AI had nothing to do with it then, and in most cases, still doesn’t.
9. Pandemic over-hiring is still unwinding. Several major tech firms nearly doubled their headcount between 2019 and 2022 to meet a temporary demand surge. The correction from that over-hiring is still playing out today, years later.
10. Layoffs are also a control mechanism. The threat of job loss has long served as a management tool — suppressing dissent, limiting bargaining power, and reminding workers that their positions are contingent. Some layoffs exist not to cut costs, but to recalibrate workforce attitudes.
Gabriel Steinhardt is fair-minded enough to acknowledge that AI has genuinely displaced workers in specific, documented cases. But he argues those instances remain a minority of the total picture, and that the AI narrative — however convenient — obscures the structural, financial, and ideological forces that have always governed how corporations manage their people. This is a conversation worth your time, particularly if you are a product professional navigating the current job market or trying to make sense of an industry that seems to be in constant upheaval.
Read Gabriel’s original LinkedIn article that sparked the conversation: The Real Drivers of Layoffs.
The speaker’s professional web site: www.blackblot.com