If your company burns through cash and can't convince others to provide you with more, you may have an urgent need to cut costs. While you know cost-cutting will require you to cause pain for your employees and others who serve your company, you must take a surgical approach.
More specifically, you should cut costs from business activities that are less essential to preserving your company's customer relationships and ensuring future growth. One way to do that is to substitute some of your people with artificial intelligence -- a major reason companies are investing so much money in AI chatbots, according to my book Brain Rush: How to Invest and Compete in the Real World of Generative AI.
Generative AI can replace people in some noncritical business activities
The replacement of people with AI has not happened in most industries. For now, the canary in this coal mine is the video game industry, which has seen growth dry up since 2020. As of August, video game companies had cut "just over 11,500 employees" -- more than the 10,500 in all of 2023 and 8,500 in 2022. In the past year, studios have shut down, games have been canceled, and "nearly every week brings news of more layoffs," noted The Wall Street Journal.
Many companies are losing money, finding it hard to raise capital, and laying off people. But because AI can produce images and write code, it's enabling companies to develop new games with far fewer team members. To lower the cost of building games that might not succeed in the market, one video game developer is reducing the size of the average development team by 80 percent, to about 20 to 25 people.