A month ago the company I work at with over 400 engineers decided to cancel all IDE subscriptions (Visual Studio, JetBrains, Windsurf, etc.) and move everyone over to Claude Code as a "cost-saving measure" (along with firing a bunch of test engineers). There was no migration plan - the EVP of Technology just gave a demo showing 2 greenfield projects he'd built with Claude Opus over a weekend and told everyone to copy how he worked. A week later the EVP had to send out an email telling people to stop using Opus because they were burning through too many tokens.
Claude seems to be getting nerfed every week since we've switched. I wonder how our EVP is feeling now.
Pretty bad decision on his part. I've been telling other engineers within my company who felt threatened by AI that this would happen. That prices would rise and the marginal cost for changes to big codebases would start to exceed the cost of an engineer's salary. API credits are expensive, especially for huge contexts, and sometimes the model will use $200 in credits trying to solve a problem that could be fixed in an hour by a good engineer with enough context.
It kind of reminds me of the joke where a plumber charges $500 for a 5 minute visit. When the client complains the plumber says it's $50 for labor and $450 for knowing how to fix the problem.
A good lesson for all - I always really liked the Picasso version:
In a bustling restaurant, an excited patron recognized the famous artist Picasso dining alone. Seizing the moment, the patron approached Picasso with a simple request. With a plain napkin and a big smile, he asked the artist for a drawing. He promised payment for his troubles. Picasso, ever the creator, didn’t hesitate. From his pocket, he produced a charcoal pencil and he brought to life a stunning sketch of a goat on the napkin—a clear mark of his unique style. Proudly, he presented it to the patron.
The artwork mesmerized the patron, who reached out to take it, only to be stopped by Picasso’s firm hand. “That will be $100,000,” Picasso declared.
Astonished, the patron balked at the sum. “But it took you just a few seconds to draw this!”
With a calm demeanor, Picasso took back the napkin, crumpled it, and tucked it away into his pocket, replying, “No, it has taken me a lifetime.”
A good engineer and / or a tenured engineer could very well be compared to Picasso in this story. A tenured engineer did not just sit their entire career drawing that painting on the napkin, they delivered other results too. But at the end of it, they are able to deliver a Picasso at a moment's notice.
It actually matches up well with the current AI scene, except backwards. We use these model which cost ridiculous amounts of money to train, and all of that effort goes into producing the outputs we use, but we're paying something not too far above the marginal cost of inference when we use them.
Extremely applicable to illustrate the difference between people (time is precious, training and experience amortize across a relatively small amount of paid work) and software (can replicate infinitely, time is cheap, startup costs can amortize across billions of hours of paid work).
Competition will prevent that from happening. When anyone can host open models and there is giant demand for LLMs companies can not easily raise token prices without sending a lot of traffic to their competitors.
It seems very unlikely that prices would rise in the long term. Yes, RAM and GPU prices are suddenly going up due to the demand spike and OpenAI's shenanigans, but I doubt it's going to last very long. Some combination of new capacity and reduced demand will most likely put things back on the usual course where this stuff gradually gets cheaper over time. And models are getting better, so next year you can probably get the same results for less compute. That $200 in credits becomes $150, then $100, then....
That “with enough context” is doing a lot of work here. If you take a great engineer, drop them in front of an unfamiliar codebase, it’ll take them more than an hour to do most non-trivial tasks.
Equal sounds like a terrible argument given all the other problems with replacing engineering thought with ai. I don't know where the line is but I expect it's far beyond equal AND there needs to be a level of "this can debug effectively in production" before that makes any sense for a real business case.
Even if you take it as true that prices have risen recently, and may continue to rise as the VC subsidies dry up, they will fall again long-term. Inference will get more power efficient with model-on-chip solutions like Taalas and God willing we will get cheaper and cheaper renewable energy.
Despite this I don't think engineers should feel threatened. As long as there is a need for a human in the loop, as today, there will still be engineering jobs. And if demand for engineering effort is elastic enough, there could easily be even more jobs tomorrow.
Rather than threatened, I think engineers should feel exposed. To danger, yes, but opportunity as well.
I can’t believe how many small to mid size companies are being destroyed by bad decisions like this.
A friend’s company fired all EMs and have engineers reporting to product managers. They aren’t allowed to do refactors because the CTO believes the AI doesn’t need organized code.
CTO is in many cases a rank more than a role, and given out accordingly. You should never take someone seriously based on their rank alone, much less a CTO.
Or more cynically they reach their level of competence, go one level further and stay there to keep them from ruining the productivity of the people doing the work...
These are like $20-50 subs, you’re probably paying your dev a hell of a lot more. Let them use the tools they want. I spend almost all of my time in Emacs or Cursor, but I still haven’t found a database client that I like better than Datagrip.
Hopefully that EVP feels embarrassed that a big bet was made that not only didn't pay off but left the company in a worse position. Some schadenfreude may be all you can expect, since this is an executive.
Wow, that sucks. Getting Claude for everyone wasn’t even the stupid thing, it was thinking that a shiny new hammer meant you could throw away all your wrenches.
lol. dude is so incompetent. changing tool for cost cutting is so stupid, we all know real cost cutting is firing people. if he is really good at he's doing, just fire 10% people and replace them with his Claude. If that didn't get backfired in 3 months, he will be CT0.
Claude seems to be getting nerfed every week since we've switched. I wonder how our EVP is feeling now.