#3 Profits, AI-Driven Growth, and the Silver Lining: Thoughts on the Current Job Market in Design
Last week, I visited my friend Martin Thörnkvist at Media Evolution in Malmö. Martin, a creative role model, has been a constant source of inspiration through his work with Media Evolution and The Conference.
While we enjoyed our coffee in the Futures Library, Martin pointed to a photo shoot happening in the hallway. “This is one of the things I love about Media Evolution,” he said. “Even in these more difficult times, lots of new businesses are being started. Sometimes by people who have been laid off, and sometimes by people who just want to try something new.”
Flashback to 2002: Ingrid Domingues, Mijo Balic, Mikael Aldman, and I had just been laid off from Acando. We wanted to stay together, but during the dot-com crisis, no one wanted to hire four unconventional thinkers who believed that the true value of any IT investment is realized “in use” – not when the product or service is available, but when it’s being used as intended. We believed that a deep understanding of people and their behavior, combined with sound strategy, was crucial to unlocking the business value promised by technology. In order to stay together, and realize that vision, we had to start our own company – inUse.
I was angry at the time. And disappointed. Losing one's job sucks, obviously. But it can also be the beginning of something new and exciting. Looking back, being laid off was probably the best thing that has happened in my career. At least so far.
A Shift Towards Profits
Over the past 12 months, many of my most talented friends have faced unemployment or a lack of assignments. Major Swedish design employers like Spotify, Klarna, and H&M have laid off staff. Respected agencies such as Black Lizzy and McKinsey Design Sweden (formerly Veryday) have shuttered, and many others are struggling.
In a high-interest market, investors have pressured companies to prioritize profits over growth in order to maintain high valuations and dividends. As a result, companies have slashed costs and shelved long-term projects, focusing instead on maintenance and short-term optimization. This shift has heavily impacted designers and user researchers, who often work on future-oriented products and services.
And it’s worked. The tech-heavy NASDAQ Composite index has risen nearly 30% in the last 12 months. Spotify’s stock has more than doubled, and H&M is up 25%. At least we don’t have to worry about the CEOs and billionaires – phew.
AI-Driven Growth
I’m confident the job market will improve, though this recovery may take longer than previous downturns in the digital design sector, partly due to the hype around AI.
A few months ago, I met with an entrepreneur who had recently sold his SaaS company to a private equity firm for $100 million. As part of the deal, he remains on board to help double the company’s revenue and profits. However, he’s expected to achieve this without adding any developers (including design, research, etc.) or expanding the support and customer success teams. Instead, he’s been instructed to leverage AI technology to enhance the efficiency of the existing teams.
The acquiring company is a giant, with hundreds of software companies in its portfolio. If they are pushing this company to grow using AI, it’s likely they have the same strategy for all their portfolio companies. And if this private equity firm is implementing this approach, other firms are probably doing the same.
While I may personally question their absolute confidence in AI, it doesn’t matter. When enough powerful people believe something, it becomes a truth – at least until reality catches up.
The Silver Lining
The job market will improve. My intuition, supported by small market signs, suggests we’ve hit the bottom and are gradually recovering. However, it will take time to return to the employment levels of a year ago.
Just as the dot-com crisis spawned many successful organizations, including inUse, this crisis will also give rise to numerous new successful companies. I'm not saying it's for everyone, but who knows, maybe this is the perfect time for you to turn that long-held business dream into reality...
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Johan Berndtsson