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— Predictions segment begins —
Kara Swisher · 1:04:50
Okay, Scott. Let's hear a prediction. What's your prediction? I predict we're gonna have a great tour coming up. It's one more week.
Scott Galloway · 1:04:58
That's right.
Kara Swisher · 1:04:58
By the way, I predict your book is gonna be at the top of the New York Times bestsellers.
Scott Galloway · 1:05:01
You're very generous. Thank you for sending that.
Kara Swisher · 1:05:03
By the way, can I just make an insight before you start? The back cover, is that your back cover that you sent? That is wonderful. It's a picture of Scott as a teenager. I don't know how old you are. 12, 13,
Scott Galloway · 1:05:13
14,
Kara Swisher · 1:05:15
and you. And I love... I thought it was... Both Amanda and I were like, wow. That was really good.
Scott Galloway · 1:05:19
Oh, thank you. That's all
Kara Swisher · 1:05:20
It's a one... I didn't see the back cover. I love it. I love it. Love it.
Scott Galloway · 1:05:23
It's all Katherine Dillon. My partner for the last fifteen years in business has been a professor of the arts at the Tisch School named Katherine Dillon, and she's she's a creative. She teaches
Kara Swisher · 1:05:32
Well done, Katherine.
Scott Galloway · 1:05:33
She teaches visual design, and she's essentially run my companies. In addition to being a great manager, everything we do just has a certain level of aesthetic strength.
Kara Swisher · 1:05:41
It's very touching, actually.
Scott Galloway · 1:05:43
It's very
Kara Swisher · 1:05:43
hard to pull that off, but it was very touching.
Scott Galloway · 1:05:46
Thank you. So, look, my prediction is the following. AI is now absolutely the equivalent of corporate Ozempic, And then that is what Ozempic or GLP one drugs do is they turn off the switch, kind of the instinctual switch that if they're screwed in front of you, you need to keep beating. And I hadn't realized how obvious or how linear... When you're on a board and the CEO's planning the next year and trying to get approval on CapEx and hiring, he or she will come in and say, our plan is to grow revenues 8%. And that means we're going to grow our headcount 6% because that'll increase profits by 8% or 12%. And there was always a correlation. And if they came in and said, business is tough, think revenues are going to be down 8% next year, then, Okay, we need to lay off between 612%. So the corporate growth number, the hunger, if you will, was always matched by how much calories you were going to intake or get rid of. And then Meta said, using AI for better targeting, they announced what I still believe is one of the most seminal earnings quarters in history. They said, Okay, we 23% last year with 20% fewer people. So there's this entirely different gestalt in corporate America, especially among information age companies, that says, wait, just because I'm growing doesn't necessarily mean I need to eat more, I don't need more calories, I don't need more people. As a matter of fact, I may be able to pull off the ultimate gangster move for shareholders here. I'm not saying it's good for society. It's that I can grow while reducing my headcount. So Amazon announced that they were doing a restructuring, 30,000 corporate job cuts, roughly 10% of its white collar workforce to they say they're aiming to reduce bureaucracy. Do you realize Amazon has said on the retail unit that they think they can maintain the same level of top level revenue, or they can double their top line revenue by 2,032 or 33 while maintaining the same headcount. That's insane. That's insane. So I think the corporate Ozempic ing of AI is already underway. The number of managers dropped 6.1% between May 2022 and May 25, while executive level roles fell 4.6%. The average supervisor now manages six direct reports, double the number five years ago, and Amazon isn't the only one. Meta cut 600 workers inside its AI division. Salesforce eliminated 4,000 support roles. Chegg reduced staff by 45%. Klarna downsized 40%. Duolingo plans to replace contractors with AI. Target 1,800 people. Paramount 1,000. Intel 24,000. Nestle 16,000. All announced reductions. And so some of this is a bit misleading because these companies went on a hiring spree after the pandemic, but these moves are still pretty big. And as the market normalizes, more workers are now moving down the ladder. 17% of workers who changed employers saw a pay cut in 2024. That's up from 15% in 2023. The share of job changers taking a pay cut was even higher for tech, 18%. Managers, 22%. And managers transitioning to individual contributor roles was 32%. So look, the hard part is who's next. So I have some companies that I think are going to announce multi thousand dollar excuse me, multi thousand person layoffs. And I did a screen here. I spent some time on this. Etsy, Pinterest, Apple, Airbnb, PayPal, and HubSpot, I believe, and this is my prediction, along with a raft of other information age darlings, are gonna announce thousand to 10,000 to 15,000 person layoffs in the next ninety days.
— Predictions segment ends —
Kara Swisher · 1:09:43
Oh, wow. That's a big one. In that vein, I'm gonna have to be laying you off, Scott.
Scott Galloway · 1:09:48
Mean I knew it was coming. I knew it was
Kara Swisher · 1:09:51
coming. Scott AI.
Scott Galloway · 1:09:52
I knew it was coming.
Kara Swisher · 1:09:53
Yeah. That's a good one. I like that. I love that. That's a great one. That's a great prediction.
Scott Galloway · 1:09:57
And just to add on this, this has real societal implications because, unfortunately, what you have is one of the greatest threats to democracies right now is that the ratio of young people who are productive and pay more than their fair share of taxes is getting flipped upside down in terms of its ratio to old people who are unproductive and don't pay their fair share. And without... It used to be 12 to one workers to Social Security recipients. Now it's three to one. And if it goes much lower than that, we're not gonna have the money. 40% of our entire budget now goes to payments for seniors. And unfortunately, our tax code encourages in our stock market, which drives everything, is now encouraging people to hire robots, not people. And the thing about robots, Kara, they don't pay Social Security or payroll taxes.
Kara Swisher · 1:10:42
Yeah. We're gonna tax them.
Scott Galloway · 1:10:43
We've gotta tax them.
Kara Swisher · 1:10:44
We've gotta tax them.
Scott Galloway · 1:10:45
We've gotta start taxing robots.
Kara Swisher · 1:10:47
Bill Gates' idea. Can I just say, in this nature of what you're saying is I sent? Alex is doing great in school, and he's a he's a mechanical engineer. I think he'll be just fine. But I I sent him the note about GM laying off a whole bunch of people too in the EV area, that largely because of the tax credits, etcetera. He goes, I love how all young people are being outcompeted by experienced workers and AI, so there is a zero opportunity for even the most qualified. Do you think we are totally cooked as a generation? Which was an interesting... And he'll do fine is the thing. But it was an interesting thing for him to write me, I thought.
Scott Galloway · 1:11:22
Yeah. But this is... What you have is labor and opportunity and equality, and that is... Your son is is frighteningly bright. He's big. He's strong. And he's gonna graduate from Michigan with a degree in computer science,
Kara Swisher · 1:11:34
which means Mechanical engineering.
Scott Galloway · 1:11:35
Okay. Even better. Which basically means when you show up from Michigan with a degree in mechanical engineering, I don't care if you're interviewing at Warner Brothers or Google. They just want you. Yeah. Because the assumption is this kid is really curious and really smart and really hardworking. There's no way of faking mechanical engineering at Michigan. There's no way of... They're gonna go, oh, he's an EPO baby.
Kara Swisher · 1:11:54
Classes are so hard.
Scott Galloway · 1:11:55
He's an EPO baby. I recognize that name, but he's clearly one of these kids who's... Who despite being born an EPO baby is really hardworking and really smart.
Kara Swisher · 1:12:03
Let me tell you. I don't help him at all. He's so brilliant. But I'm just saying he... But that's his mentality. Like, you know what I mean? Like, a lot of younger people, even someone as qualified as Alex is is worried. They're worried
Scott Galloway · 1:12:14
about this. This is the reality. A kid like that garners a disproportionate amount of wealth at a young age. There's more opportunity for... Alex is in the 1%. It is never... There has never been a better time to be a 20 or 22 year old in the top 1%. There's never been a worse time to be in the bottom 90. And that is the kids who come out of a a decent school, but not a great school, but had a lot of student debt, and are good but not great, a lot of us... I would have been fucked. I was not especially impressive at 22. And I got a job at Morgan Stanley because I lied about my grades and talked my way, and I'm a good interviewer, I rode crew, and the guy who ran the fixed income department rode crew. But in this age, if you don't have your shit together, if you're not one of the top 1%... And the problem is we all delude ourselves into thinking our kids are in the top 1%, and I can prove to every parent 90% of our... 99% of our children are not in the top 1%. So the inequality... I I say this in my class. It's never been easier to be a billionaire. I say, look around. My classes are a 160 kids. Two or three of you are gonna be billionaires through tech, alternative investments. I said, but, unfortunately, there's probably about 10 or 15 of you who are gonna be living with your parents at 30.
Kara Swisher · 1:13:26
Yeah. Yeah. Well, let's hope Alex is one of those billionaires because then I will live live high on the hogs.
Scott Galloway · 1:13:31
I go to Korea a lot for treatments.
Kara Swisher · 1:13:33
He promised me he'd buy me a house with a roller coaster if he got really rich, which I'm very excited for.
Scott Galloway · 1:13:37
I I was not expecting that.
Kara Swisher · 1:13:39
Anyway, we have to move on. Because guess what? I'm gonna be interviewing Scott Galloway really soon.
Scott Galloway · 1:13:43
That's right.
Kara Swisher · 1:13:43
On. Talk about his book. Anyway, we wanna hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com/pivot to submit a question for the show, or call 85551 Elsewhere in the Karen Scott universe, gosh, you interviewed someone you made fun of on sixty minutes, recently. This week on Professor G Market, Scott spoke with Andrew Ross Sorkin about his new book, 1929, Inside the Greatest Crash in
Guest · 1:14:06
the World.
Scott Galloway · 1:14:07
Fun of Leslie Stall in that area.
Kara Swisher · 1:14:08
Well, alright. Wall Street history and how it shattered a nation. Let's listen to a clip from our favorite Canadian.
Guest · 1:14:15
The truth is that, you know, over time, the market goes up. A lot of people, by the way, since this book came out, they said, oh, Andrew, you're calling for a crash. It's all gonna end terribly. What are you saying? And the truth is that you can have all the Cassandras in the room saying the sky's gonna fall, but over time, things have gone up. And I do think that's worth noting because being a professional optimist has been a better business than being a professional skeptic, again, over time.
Kara Swisher · 1:14:49
Covering his ass on that one.
Scott Galloway · 1:14:51
He's actually he's actually pretty bold, though. He's not afraid to make statements about CNBC. And
Kara Swisher · 1:14:58
Yeah. No. I love that.
Scott Galloway · 1:14:59
First, want Andrew to run for mayor of New York. And two, I want I want Andrew to be the trustee for my estate. I think he's just such an honorable, smart, nice man.
Kara Swisher · 1:15:07
He's... It's a great book. I have it. It's really terrific, actually. I I love those historical books, and he's a... We love Andrew.
Scott Galloway · 1:15:13
We love you, seven years.
Kara Swisher · 1:15:14
We love you. We want you to we want you to father all our children.
Scott Galloway · 1:15:18
To imagine he does all this while maintaining a status as an undercover undercover operative for the Canadian intelligence That's correct. Minute. I mean, it's really impressive he's able to balance all this.
Kara Swisher · 1:15:27
Yep. Yep. And he does all the pickup and drop off at preschool. Anyway, speaking of Canada, we're going on tour. We are sold out in Toronto, Boston, and San Francisco, but we still have just a... I think few tickets in DC, not very many. Some in New York is a big place, and LA, and Chicago. Please visit pivottour.com for tickets, especially in Chicago. It's a very big venue. We've got a big venue because you're such big shoulder people, but come see us there. Okay. That's the show. Thanks for listening to Pivot, and be sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, read us out.
Scott Galloway · 1:16:02
Today's show is produced by Lara Nayman, Zoe, Marcus Taylor Griffin, and Kate Gallagher. Ernie and her Todd engineered this episode. Manolo Moreno edited the video. Thanks to officer Drew Burrows, Miss Severo, and Dan Shalon. Nishat Kurawa is Vox Media's executive producer podcast. Make sure to follow Pivot on your favorite podcast platform. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com/pod. We'll be back later this week for another breakdown of all things tech and business care. I'll see you in a few hours.
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