Tag: Job Market

I think one of the biggest mistakes in AI marketing is positioning a product as a replacement for people. That message can win attention in the short term, but I believe it quietly drains trust over time.

This is a little different from what I usually write about, but it matters. The way we talk about AI shapes how customers, employees, executives, and markets respond to it.

In this memo, I want to focus on three things: why “substitution positioning” feels powerful at first but weakens a brand later, what the data says about whether AI is actually replacing people, and how I think companies should position AI instead.

The cardinal sin of positioning in the AI era is replacement. I call it substitution positioning. It is tempting because it sounds bold, efficient, and disruptive. But over time, it creates anxiety, skepticism, and credibility problems.

We have seen this pattern already. Anthropic CEO Dario Amodei predicted that software engineering jobs could disappear within 6 to 12 months as models began doing most or all of what software engineers do end to end. Yet demand for software engineers has continued to look strong.

OpenAI CEO Sam Altman also predicted that many customer support jobs would go away because AI could handle that work better. Soon after, customer service hiring began outpacing the broader job market.

I understand why fear works as a marketing tool. The fear of being replaced gets attention fast. It got me, too. When powerful AI models gained traction, I worried about my own future. But when I still see AI companies hiring copywriters, SEOs, engineers, and support teams, I sleep better.

Fear sells because it taps into fight-or-flight. Layoffs make that story even louder. They let companies frame cost-cutting as innovation and make the replacement narrative feel more real than it may actually be.

But I do not think the facts support the clean replacement story. In New York, companies can indicate when mass layoffs are caused by technological innovation or automation. In one reported period, more than 160 companies filed mass layoffs affecting roughly 28,300 workers, and not one chose AI as the reason. That list included companies such as Amazon and Goldman Sachs.

Researchers at Yale also studied employment data from the Current Population Survey over 33 months and found no evidence of job displacement from AI. To me, the pattern looks less like instant replacement and more like the earlier waves of computers and the internet changing how work gets done.

That is why I keep coming back to this point: stop trying to make replacement happen. It is not happening in the simple, dramatic way many AI narratives suggest.

AI is powerful, but it is also inconsistent. In its current form, it can do some tasks better than humans and fail badly at others. That paradox is often called the Jagged Frontier.

The Jagged Frontier idea matters because it explains why some people see AI as transformative while others remain lukewarm. A BCG and Harvard study of 758 knowledge workers found that people get the most value from AI when they understand what it is good at and where it breaks down.

Microsoft reached a similar conclusion in its 2026 Work Trend Index Annual Report. The company found that a small group of advanced AI users, described as Frontier Professionals, were not simply using AI more often. They also knew which mode of AI use fit each task.

That distinction is important. The best AI users are not handing everything over blindly. They are applying judgment. They know when to use AI as a helper, when to use it as a collaborator, when to use agents for multi-step workflows, and when to keep a human firmly in control.

I still do not trust most AI workflows enough to leave them running with no maintenance, review, or quality assurance. The question I ask is simple: would I bet my brand, customer experience, or revenue on a fully automated workflow with no human oversight?

Klarna is a useful warning here. The company publicly promoted the idea that AI was doing the work of hundreds of agents and helping reduce headcount. Later, it reversed course and rehired humans after leadership acknowledged that aggressive cost-cutting had lowered quality and that customers still wanted a human option.

That is the tradeoff I see with substitution positioning. It creates immediate attention, but it can damage long-term credibility. The words often do not match the operational reality.

Replacement positioning could work if customers truly wanted full replacement and if the technology were consistently ready for it. I do not think either condition is true.

Cost reduction is a strong AI argument because it shows up quickly on the P&L. Productivity gains usually take longer. They build inside companies over time and often take even longer to appear across the broader economy.

But when replacement positioning goes beyond cost-cutting and becomes people-cutting, I believe it starts to antagonize the very people companies need to win over.

We have already seen backlash. Duolingo’s AI-first memo drew heavy criticism before the company reframed AI as a tool to accelerate work rather than replace contractors. Surveys have found that some workers refuse to use AI tools because they fear job loss. Pew has reported that many U.S. adults are more concerned than excited about AI in daily life. Reuters/Ipsos polling has shown widespread fear that AI will permanently displace workers.

There is also a quality problem. When employees believe the purpose of AI is to replace them, they may disengage or produce lower-quality work. In my view, that is not just an adoption issue. It is a positioning failure.

Executives often feel more excited about AI than the employees asked to use it every day. That gap matters. If leadership talks about AI as a replacement engine, employees hear a threat. If leadership talks about AI as leverage, employees have a reason to learn.

Token economics also complicate the replacement story. Some companies have bragged about massive AI usage, but token costs are still a real business variable. As those costs normalize, the math may make junior employees look interesting again, especially when human judgment, context, and accountability are part of the output.

So what should replace replacement? I think the answer is enhancement. Instead of positioning AI as a way to remove people, I would position it as a way to make capable people more effective.

AI can be used in two broad ways. A company can try to reduce the number of people, or it can grow output with the same number of people. The data I have seen suggests that productivity gains often create the stronger return.

A National Bureau of Economic Research paper surveyed 750 executives about AI’s impact on productivity and labor markets. Larger firms showed more interest in replacing labor costs, but the highest ROI came from productivity growth.

That is the lesson I take from the research: doing more with the talent you already have is often stronger than trying to remove the talent that knows what good work looks like.

Building products has become easier, but distribution has not. When supply explodes, the scarce thing is not output. The scarce thing is being the product, brand, or service that actually gets chosen.

That is why positioning matters more than ever. Product quality still matters, but the way I frame AI use can determine whether people see it as empowering or threatening.

My takeaway is simple: I would stop selling AI as a people replacement. I would sell it as judgment leverage, workflow acceleration, and creative expansion. Fear can get attention, but empowerment is a better long-term strategy.

This post first appeared on the author’s website and is republished here with permission.

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