Who did they overhire? Like, Covid didn’t just increase the number of people in the field. Prior to Covid there was a so called talent shortage. The hiring that did occur was mostly net zero in aggregate. Workers got poached, grads got hired, compensation went to far up. And, that’s what they mean by overhired. They over paid. They now see the benefits of hiring cheaper talent on another continent. Cheaper talent that can use the same tools as you are going to use. AI equalized a lot of talent, the US labor doesn’t have the edge it once did. In a sense, this should have been happening at higher rates much earlier than it did but for some reason investors saw value if you paid big salary to smart people in one part of California for a very long time. Now, the thing that should have happened is happening. And they also realize it’s not limited to California, turns out even salaries in Alabama are high compared to other parts of the world.

There is also much more productivity. But I’m not sure it’s really a driving force yet as with the new productivity people are still just trying to do more with it which doesn’t translate to efficiency. Yet. It might once AI loses its wow factor and is just status quo. I feel like this is fast approaching but still may be a few years away.