This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money.

> It isn't as if there are enough projects around to keep the other 2/3 busy

I've never worked at any company where there was any limit to the work to be done. Sales people don't give a shit what your product can do, only what they can sell, and they never sleep.

> This sounds like an attempt to rationalize the fact that your business isn't that effective, otherwise adding more people would result in making more money.

Yes, or that businesses are expecting a slow down in the economy that hinders their ability to sell (i.e. their customers are going to cutback on spending)

This was the case last year (or maybe it was the year before) where technology companies saw their customers reducing spend and tightening belts.

The current economy feels hard to figure out, in that the market keeps going up but so is inflation and the struggle of the everyday American at least.

Perhaps that is leading technology companies to be more conservative in how much they produce.

You can always find things to do but how much of that work has a positive ROI, or contributes to your business? You always have some bottlenecks, let's say implementing features was your bottleneck before AI, and you had a team of 15 product engineers with a 1y roadmap. With Claude Code a team of 5 was able to get that done in let's say 3 months. You don't magically come up with 9 months of work for 15 people right away. And your bottleneck will now be sales or something else, but your engineers won't convert to becoming sales people (or at least not all of them), and you might only need 1-2 more sales people, not 15.

>I've never worked at any company where there was any limit to the work to be done. Sales people don't give a shit what your product can do, only what they can sell, and they never sleep.

The issue is how much of that work is "valuable" in the sense = makes money.

I have both been in projects and seen projects which were canceled once it turned out they didn't make money (bad sales? bad product? bad market fit? a bit of everything?). This you can only afford when you have money to spare (= with debts? high profits...?).

With the interest rates so high, how can a company justify hiring dozens/hundreds of people more? It's a risk, and what I am seeing now is that companies are shrinking left and right to focus on the business that makes money and reduce headcount on what they believe doesn't make money at all, or it's a cost too high for their "long term strategy" or whatever. Right now the only metrics that they are caring about is EBIDTA. They don't even care anymore about ARR, they are becoming irrelevant as long as they stay within a range (we want 20% increase, but we're ok with 5%).

The AI will replace everything and everyone is working out pretty well for Anthropic/OpenAI, though.

So you never worked at a consulting agency working on bids for outsourced development.

Only if all roles in a company are bottlenecked in the same way.

Example: natural monopoly in some geographically-locked domain. Just to grab an example. You have 150 people in the field, can't let them go because the company still needs hands and eyes on the ground. You have 15 people in some other, paper-pushing department. Thanks to AI advances, you only need 10 of those now.

> This sounds like an attempt to rationalize the fact that your business isn't that effective,

That's actually it. The part that can be sped up with AI don't change how slow everything else still takes. If you need 2 weeks to see the results of a change before AI, you still need that after AI.

Basically, your business is not keeping pace with development.