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AI First with Adam and Andy: Inspiring Business Leaders to Make AI First Moves is a dynamic podcast focused on the unprecedented potential of AI and how business leaders can harness it to transform their companies. Each episode dives into real-world examples of AI deployments, the "holy shit" moments where AI changes everything, and the steps leaders need to take to stay ahead. It’s bold, actionable, and emphasizes the exponential acceleration of AI, inspiring CEOs to make AI-first moves before they fall behind.
Adam (00:00)
Yeah, so I'd say, first of all, your points are well taken. and Jason Calicanas is I listened to that same episode that his are well taken. Like there's no question that in certain companies and in certain industries, there's going to be significant displacement, which sucks for the people in that industry and it sucks in general. A. B,
I also, in support of your point, I don't agree that you can look at today's numbers and say, the evidence isn't there. To your point, it's too early. we know that AI adoption and proficiency at the enterprise level is in like the very like first inning. And and we've seen what happens when a company emulates what happens in the third or fourth inning, like they don't need as many people.
Andy (00:40)
This is AI First with Adam and Andy, the show that takes you straight to the front lines of AI innovation and business. I'm Andy Sack, and alongside my co-host Adam Brottman, each episode we bring you candid conversations with business leaders transforming their businesses with AI. No fluff, just real talk, actionable use cases, and insights for you.
Greetings, everyone. Today we're going to talk about.
The impact of AI and agents on labor and our perspective on it that we share in our book, Agentsinc.com. And there's a debate, and we wanna talk about the debate around labor, particularly in the United States, as a result of AI. So let me frame it up and then I'll ask my fellow co-host to chime in. The debate is
Basically those that think that AI and particular agents are gonna replace significantly the labor force, particularly in entry-level jobs, as well as many white-collar knowledge worker jobs over the next two to three years. There's gonna be a significant labor impact, negative labor impact.
as a result of the technology. On the other hand, there's a bunch of people that say that the technology, like many technologies in the past, is gonna unlock great productivity and a whole set of new jobs, and as a result, the labor forecasts of doom and gloom are overstated.
In our book, Agents Inc., we actually come down, and I'll state it here clearly and then ask my fellow host to chime in. We come down that when we look at particularly restaurants, retail, but we look at any business, law firms, accounting firms, professional service firms, finance, the whole
sleigh of industries, we start with the like, this business probably can be run with at least 50% fewer people today. And we're clear about that and state that in the book. That was our perspective three months ago. We reserved the right to change our mind and we reserved the right to be totally wrong.
But that's our perspective. So I think that's still my perspective. that might be actually generous. It might be greater than that. We talk about instances of that in the book. With that framing of the debate, Adam, do you want to chime in and add some color to this conversation?
Adam (02:51)
Yeah, because I think it's really important, even on the 50% point you're making, to provide some color and some nuance. And I know
Andy (02:58)
That's why I asked you to chime in.
Adam (03:00)
exactly. So first of all, the 50% rule of like in a vacuum in general, if a firm's not looking to innovate, grow, or it's not growing on its own, and they're just chugging along.
And they were able to completely be AI first and AI proficient as a company. I'm with you. There's no question that even in today's state of the union, which is only getting better rapidly, of AI, they could use AI to reduce headcount by 50%. But that's in a vacuum. That's assuming the company's not trying to do more things. That's assuming the company's not growing really fast.
or trying to like innovate in certain ways that the AI is unlocking. So, in a vacuum standing still, I think it's almost not debatable that a totally agentic transformed company with AI can operate at 50% you know greater or 100% greater efficiency or 50% less people.
The thing that people have to understand is that the world doesn't work exactly like that. Not every company is just standing still in a vacuum. and we actually make this point in the book. We actually say the reality is the same forces that allow a company that's standing still in a vacuum to be able to be, if they wanted to lean into agents and and have 50% less headcount, that same company could do double the activity with the same headcount, right? So the same issue applies.
But it doesn't mean that the first 50% rule isn't a good rule of thumb to sort of keep in mind, which we're saying, which is like that's the level
of efficiency gains and unlocks that you can get from AI. So
that's point number one that's important to know. Point number two, in my opinion, just to get into this labor debate, as more and more companies deploy AI, even at today's AI.
Let alone next month's and the months after, which is astoundingly accelerating and advancing. as companies start to adopt more and more AI, they will need less people to do the same work they're doing today. You know, maybe it's half as many, like we said. So if you take our rule, 50% rule, and you apply it to not just like a standing still company in its headcount, but
Work that's happening. It's like, for the work I'm doing today, if I'm fully AI first, I'm gonna be able to use less people to do the same work I'm doing today. So if I'm not having to do more work, then I don't know what I'm doing, not using AI and becoming more efficient. But also, why am I not trying to grow and innovate and create new opportunities and new unlocks for our business? We make that point in the book as well. but at the societal level.
Here's what gets really interesting. an example ourselves, Andy, we're working on a project which we're gonna talk about more publicly later in the year, where we're gonna do a startup ourselves that's gonna be totally agent native from day one. And we believe that that startup will only need a few humans and a bunch of agents to run the startup effectively from the headquarters level. But the startup's in the retail restaurant space, and it's gonna employ.
A bunch of people in the field, in the stores, whatever. So we may only have two people or 10 people doing what eventually normally would have required a hundred people. Okay, so you're like, well, what happens with those 80 other jobs? I'm like, well, first of all, they wouldn't have existed because this opportunity wouldn't have existed but for AI. And number two, we're creating jobs in the stores we're gonna be able to open because of this. We're creating jobs for the vendors that are gonna supply us. And so
I actually feel like from a societal level, I personally believe you're going to see more abundance, but I believe on the way there, you're going to see pockets of either individual companies or sectors that are going to get really hurt and go through like some turbulent times. That's my take on it. So
I I think it's going to kind
Andy (06:35)
Yeah, I mean just a
Adam (06:36)
of wash out, is my point. I personally think that.
And maybe I'm being an optimist, but I think it's going to be unevenly distributed both in timeline and in terms of like,
sectors and companies about how it applies.
Andy (06:45)
I mean, I've been listening to podcasts specifically, I'll name it all in, and David Freeberg in particular, but a number of them make David Freeberg's like, look, the data does not support the AI doom and gloom story around labor. and then Jason,
is basically like, look, at the very least, entry level jobs hiring has reduced there and there's job displacement. And the evidence that he quotes is like, if you don't think self driving cars are gonna replace taxi drivers, like, you know, the data supports it. Like
Waymo is absolutely gonna replace taxicab drivers and Uber drivers. Like it's clear as day. Like full automation, same job to be done. And in those cities where Waymo exists, that data does exist. I'm clearly in that camp. I think in general you're too optimistic and maybe I'm too dire.
But what I've experienced in talking to business leaders who start to play with and try to really understand AI is that the first thing they do is they look at their existing business and they look for cost savings, not unlock. That's one point that we make in the book.
And as part of that cost savings thing, it's just sort of natural instinct. Why wouldn't we operate at a higher profit margin? We don't need to hire there. And there's just a whole host of those. So I think the 50% number in the book is probably low.
Like you know, the example that you're talking about in our heads,
Adam (08:07)
Yeah.
Andy (08:08)
but in our own forecast, we actually are using a list like, look, it's probably 80%. I'm seeing evidence of 70 to 80 percent. And in our book, we took a process that we set out to do a 90% cut in time.
Okay, it ended up being 85%. So I think we'll see. it's not something that I'm proud of or whatever. I'm just like eyes wide open. That's my point of view and I'm just sharing it.
Adam (08:31)
Yeah, I'll just add two things real quickly because I know we wanna this is a min.
Andy (08:34)
Yeah, like wrap us up.
Adam (08:35)
Yeah, so I'd say, first of all, your points are well taken. and Jason Calicanas is I listened to that same episode that his are well taken. Like there's no question that in certain companies and in certain industries, there's going to be significant displacement, which sucks for the people in that industry and it sucks in general. A. B,
I also, in support of your point, I don't agree that you can look at today's numbers and say, the evidence isn't there. To your point, it's too early. we know that AI adoption and proficiency at the enterprise level is in like the very like first inning. And and we've seen what happens when a company emulates what happens in the third or fourth inning, like they don't need as many people. Okay, so to your point.
That being said, I want to offer one other point we haven't made yet, which is important. When companies become AI proficient, just like humans become AI proficient, they get like busier. It's weird. You've seen it, I've seen it like you get this like almost like AI psychosis thing going on, and you become busier. Like, well, I could just make a living book website. I could just make a surfing education site for my daughter. and all of a sudden you're doing more. And
one of the arguments for where this isn't going to be as dire as it could be is that as people get more capable, it's not just that they do more, they look for unlocks, they just get like busier. And when they get busier, they tend to sort of not let people go. And so, you know, that's to me of all the arguments of why even in an individual company, like it won't just turn into like headcount reduction.
is I've seen this activity thing happen. And now I'm not gonna say it's gonna happen in every company, but it's gonna happen in some companies. And then the final point I'll make, which we talk about in the book, is the rise of the one person company in solopreneurship. and so, you know, these people are gonna get like laid off in the cases where it is the 50% rule does hold. And then they're gonna go like start a company using AI, or their friend or somebody else has started a company, and they might need 20 people. They might only need seven people.
But then one of those seven people could be the person laid off in the bigger company. So I think that there's gonna be stuff like that that happens that is a counter argument, but your point's well taken.
Andy (10:40)
Yeah, I great closing comments. The one thing I'll say is we're probably gonna have an episode on solopreneurship and a concept in the book called Swarm. and stay tuned for that. But we wanted to get our thoughts out, which we talk about in Agents Inc. you can visit the book website at www.agentsincbook.com.
and one of the key points in that book is we talk about this fifty percent number and there's that debate of the my god, AI's gonna take all the jobs or like, that doom and gloom story is totally overstated. We wanted to chime in. So hopefully you have our perspective on that. Hopefully you'll visit the website and
And experience either the mini version or whatever version you want of Agents Inc. With that, we thank you all for listening to AI First with Adam and Andy. For more resources on how to become AI First, you can visit our website, forum3.com, download case studies, research briefings, executive summaries, and join our email list.
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