You’ve probably seen the headlines. “AI job cuts.” “Automation replacing humans.” Some CEOs are even proud of it.
OpenAI CEO Sam Altman says the next billion-dollar company could consist of one person thanks to AI advances. Anthropic CEO Dario Amodei thinks AI could eliminate nearly half of all entry-level white-collar jobs in five years
Already this year, more than 64,000 people have been laid off across the tech sector, with Microsoft and Intel leading the charge and AI being a major factor.
Not only is this short-sighted, it’s fundamentally bad business. The companies cutting people today in the name of AI will be the ones playing catch-up tomorrow.
There is no doubt that AI is excellent at doing more with less. It speeds up processes, cuts down repetitive work, and buys back time. But AI on its own cannot create the next generation of products and services.
The businesses that win in the long term are the ones that innovate. That create new products. That reimagine how things should work, and find radical breakthroughs that impress their customers in new ways.
The data backs it up. McKinsey found that companies with innovation baked into the culture are 3.5 times more likely to outperform their competitors.
And history supports it as well—just ask Blockbuster. Back in the early 2000s, it had strong profits and a large customer base. But what it lacked was the foresight to use its leading position to build the next wave of value. Netflix built it instead.
And that kind of creative thinking still only comes from people. Ultimately, it comes down to this: AI doesn’t invent. It recycles. It’s trained on other people’s ideas, imitates patterns, and doesn’t jump the curve.
That’s not a flaw—that’s how AI is designed. As academic Mark Runco puts it: “AI can only produce artificial creativity.” It can support creative people, but it can’t replace them.
If your strategy is to lay off the people who could create the next big thing—good luck. You might run a tighter ship, at least in the short term, but don’t be surprised when your product roadmap starts to fall flat.
So, if you’re leading a large business, what should you do instead? Keep hold of your talent. Tell your team to use the extra time they have freed up with AI to innovate. Give your people the headroom to think.
Some of the world’s most successful—and perhaps more importantly profitable—products started as side projects inside Google, among them Gmail and AdSense. Not because they were asked for. But because smart people had the space and time to explore.
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