You probably don’t remember Swatches, but these were all the rage in the 1980s. They were only worn by the coolest kids, which meant I didn’t have one. But it also meant I coveted one. I was convinced a Swatch, or my sweet breakdancing moves, were the only way to land Jessica Hershey. That’s right - I thought this watch would make me irresistible in 4th grade. It’s a Swatch Jellyfish with a skeleton dial and a classic 1980s neon strap. Drool city, right?
Unfortunately, they were expensive and my parents didn’t have the money for one. But one kid in our neighborhood did and I was jelly (get it?). The only reason he had it was that his mom worked at a factory that made parts for this watch, so they had all gotten one from Swatch. “Maybe they’ll give you guys another one for Christmas and you can give it to me because you already have one…” I wondered aloud.
That’s when he crushed my hopes…his mom had lost her job to a robot. I had no idea what a robot was, but I instantly hated it because of the impact it was going to have on my social climbing. My breakdancing left a lot to be desired and I had been putting a lot of my eggs in the Swatch basket.
That was my first experience with the impact new technology can have on workers. It’s fascinating to me that for the first time since those Swatch layoffs, technology might be impacting white collar workers more than blue collar workers. We have a son in HVAC school right now and believe his prospects over the next decade are probably safer than some of our other kids.
Bloomberg recently put out a piece on the US cities with the biggest exposure to AI advancements. A lot of names on this list are the ones that have, until now, disproportionately benefited from technology.
There’s a saying in AI meant to alleviate concerns among employees: AI won’t replace your job, but someone that uses AI might.
Sounds nice, but I’m not sure it’s entirely true.
I can picture the Swatch supervisor reassuring the crew: A robot won’t replace your job, but someone that uses a robot might.
I suspect we are further along on our AI journey than most because we already use it to abstract loan documents, hedge confirms, SREOs, mortgage statements, JV Agreements, etc.
So far, no one has lost their job because we use AI. All the experts are still needed to validate and to handle the edge cases. I invested way too much into the team to jettison that expertise. But that doesn’t mean our use of AI hasn’t had any impact.
Here’s where I have seen the biggest changes:
New hires - my existing team can do more by leveraging AI than if we hire someone new, so this dampens all my hiring projections. I would rather invest in scaling our AI abilities so our small team of experts can do more than to invest in new people that always want to take their birthday off and who tend to get sick on Fridays.
Generalists - if you aren’t an expert, I can replace you with AI. You may recall in a previous tech newsletter I did the entire LoanBoss 2025 marketing plan using AI. Topics, content, images, etc. It felt very similar to working with a marketing person. That marketing team would have needed to leverage my experience to help create the content. Instead of spending my time with them, I spent my time with AI models.
Time - I also think this evolves over time. That Swatch factory probably started off by laying off the people doing the things that the robots could do day 1. Over time, the robots slowly started replacing everyone. It worked its way up the food chain until it got to the Supervisor, who probably deemed himself irreplaceable…speaking of which…
Middle management - I think there’s huge risk to this layer of personnel. Fewer people to manage means fewer middle management roles.
The most mundane parts of a workflow - AI will help accelerate the first 80% of a workflow so the experts can focus on the most nuanced parts of the workflow. Think of those Swatch factory workers - I bet robots replaced 80% of them pretty quickly. My friend’s mom was probably doing something mundane on that assembly line.
AI is like any other tool. The right tool, in the hands of an expert, is a powerful thing. By itself, not so much. If you are the tool, you are replaceable.
I guess that means the lesson is “don’t be a tool.” Unfortunately for me, the Real Boss™ says “you’re such a tool” a lot.
Just to be safe, I have started practicing my breakdancing moves. I won’t get caught putting all of my eggs into one basket again. There’s no way AI can outdance me, right?
