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thewebguyd | on: Microsoft starts canceling Claude Code licenses
I suspect AI would have to get drastically more expensive before it starts looking worse than payroll. If one developer using Claude Code can effectively substitute for 2 developers, you are already coming out ahead at current API pricing assuming very heavy usage, your cost is going to be ~1.5x developer (factoring in beyond salary - benefits, PTO, the other overhead that comes with having employees).

So you're getting 2 for the price of 1.5. Scale that up to 500 devs at a big company and it's a big chunk of change saved on payroll.

Keeping your headcount or hiring humans instead, AI would have to start to cost upwards of $15k/month/developer or more before it costs more than hiring. You're looking at about 4 billion tokens per month before humans start to break even or are cheaper.

jayd16 | parent | next
You're starting from the assumption that its a 2x benefit. That's a massive leap.
thewebguyd | root | parent | next
True, that was more hypothetical if it got good enough to 2x.

But even taking a more realistic 1.25x (20% time savings) gain, lets say you drop from 500 to 400 devs, you'd have to hit around $4,000/dev/month in token spend before hiring humans again would break even.

Payroll is just expensive, in most companies it's by far the biggest expense. AI still has to cost drastically more before investors would call it out as being worse than increasing headcount, from a pure dollars perspective.

mrgoldenbrown | root | parent
Also assuming that current API pricing is sustainable and not subsidized.
ilovecake1984 | parent
This is economy dependant. It’s really Indians why will take the brunt of AI job losses.
__mharrison__ | root | parent
Interesting point. Outsource the outsourcers...