Snap's layoffs spotlight AI-driven small team trend

Snap CEO Evan Spiegel outlined plans to reduce 1,000 jobs as part of a transition the social media firm initiated last year towards organising staff into small, AI-powered "squads."

He mentioned that the approach is already in effect as AI reduces repetitive chores and accelerates efficiency.

Leaders at various other major corporations have recently expressed similar thoughts on the advantages of slimmer workforces and how AI assists in making compact teams more productive. Sometimes, these remarks were connected with job cuts.

"Claiming AI doesn't alter the skill sets we need or the number of roles in specific sectors would be misleading. It does," Mike Cannon-Brookes, CEO of software company Atlassian, noted last month in a financial report regarding plans to cut 1,600 positions.

"We're beginning to observe tasks that once needed large teams now being completed by a single highly skilled individual," Meta leader Mark Zuckerberg stated during a January earnings discussion with analysts.

The micro team movement isn't confined to Big Tech. JPMorgan chief Jamie Dimon stated in his yearly letter to shareholders this month that "the real competitive challenges" are fought by small, highly focused teams.

While startup leaders have long valued resourcefulness, this belief has been gaining influence among well-established businesses over recent years due to the AI surge.

Experts assert that technology permits just a handful of workers, or even individuals, to accomplish what used to require large teams.

"Soon, we'll witness 10-person companies attaining billion-dollar valuations," OpenAI CEO Sam Altman predicted in February 2024.

Smaller teams represent a connected move away from middle management and towards flatter organisational frameworks.

In the past month, Block CEO Jack Dorsey described the "most optimal" setup as having all 6,000 of the payments company's staff report directly to him, while Amazon leader Andy Jassy commented that flattening the tech giant's structure has boosted its speed.

Taking advantage of shrinking teams necessitates altering how work is executed, mentioned Erik Brynjolfsson, an economics professor at Stanford University.

"The winners won't just be the leanest organizations," he stated. "They'll be those that effectively redesign work so that humans and AI enhance each other."

Going too lean has its pitfalls, remarked Matt Poepsel, vice president of talent optimisation at the Predictive Index, an HR software company.

Employees who depend entirely on AI for decisions might reinforce personal biases, he claimed, while groups offer checks and balances.

Companies venturing into the tiny team route also risk damaging morale, which might adversely affect business results, noted Alex Lovell, a political psychologist at O.C. Tanner, an employee-recognition software firm.

An additional potential drawback is that tiny teams might deplete talent opportunities, indicated Soumitra Shukla, a research fellow at Harvard Business School. Removing entry-level roles, for instance, can lead to shortages of seasoned staff.

"There aren't as many individuals to promote to higher positions," he said.

Moreover, early-career professionals might start questioning their opportunities for advancing within companies adopting tiny teams, added Shukla, also a researcher at The Burning Glass Institute, a nonprofit research group examining the future of work and education.

"Junior employees won't remain junior forever," he observed.