Layers of Layoffs: Peak Software, Hollow Companies
AI-driven layoffs may be less about replacing workers than about shifting economic power upward toward the companies that control compute, infrastructure, and the conditions of digital access.
Abstract
Recent workforce reductions across the technology sector are commonly framed as a consequence of AI-driven efficiency. This commentary proposes a different interpretation: that AI is accelerating a restructuring of the digital economy in which value and control migrate upward toward compute, cloud infrastructure, models, identity systems, and data platforms. As software becomes easier to produce and lower-margin labor is pushed outward to contractors, service providers, and smaller "remora" firms, hyperscalers are positioned to capture value by controlling the infrastructure on which others increasingly depend. This creates the possibility of artificial scarcity within technologies otherwise capable of extraordinary abundance. The same dynamic helps explain growing interest in digital sovereignty, public compute, open-weight models, interoperability, Right to Repair, and meaningful device ownership. These are not separate technical or regulatory debates, but connected questions of digital citizenship and economic agency. The central issue of the AI era may therefore be less who builds the most capable model than who controls the computational layer beneath digital society.
artificial intelligence digital sovereignty digital citizenship cloud computing artificial scarcity open-weight models Right to Repair platform economics compute infrastructure enshittification
Version history
the same DOI resolves to every version
- Version 1 unreviewed · Oct 2026 Initial rapid publication at submission.