Pressure on stock prices and our super is set to take hold again today with multiple negative forces coinciding. Read on…
Pressure on stock prices and our super is set to take hold again today with multiple negative forces coinciding, including Iran keeping the Strait of Hormuz shut and big tech companies killing jobs because of AI.
The latest job killer was Mike Cannon-Brookes, who told 1,600 workers that they had to go. Of that number, 480 positions lost were for local employees. This follows WiseTech last February announcing that 2,000 workers will be replaced because of AI over the next two years.
Meanwhile, our former Afterpay business, now American-controlled, told its team that 4,000 jobs were set to go again because of AI.
For Atlassian, the 1,600 job cuts represent 10% of its workforce. This reduction of staff follows claims that businesses like this were on death row because of AI, which Cannon-Brookes says is “ludicrous”.
This comes as Atlassian’s share price has fallen by 67% in a year. Cannon-Brookes’ reported wealth has been more than halved from $14.9 billion to $7.7 billion. Other companies in the software as a service (or SaaS) industry are all set to be challenged by AI agents, such as Anthropic’s Claude.
This AI agent has been hailed as a better writer of code than the top tech workers in businesses, such as Atlassian.
Companies such as WiseTech, Xero and other great local tech companies have seen their share prices fall because stock market speculators have sold these companies first and asked questions about the real threat of AI to these businesses later.
Atlassian (one year)
Also, how you might lose your job has become high-tech as well, with news.com.au reporting the following: “In an all-staff email from chief executive Mike Cannon-Brookes, staff were told they would know via email within 20 minutes if their role had been impacted or consultation was opening in their region”.
We’re seeing early signs of what will happen to jobs that AI agents can do better and cheaper. And one day job losses because of AI in many sectors of the economy will be another threat to stock prices.
This early phase of the AI revolution will actually improve the efficiency of companies, lower costs and push up profits, as well as share prices. But as job losses rise, we’ll see lower consumption because of rising unemployment, which will threaten economic growth, company profits and share prices.
While that’s the future, right now the bigger threat is Iran, whose new Supreme Leader told the world overnight that the Strait of Hormuz must remain closed.
CNBC reported that Iran’s new supreme leader, Mojtaba Khamenei said on Thursday that the closure of the Strait of Hormuz maritime passage should be continued as a “tool to pressure the enemy”, in his first public statement since being appointed.
This wasn’t good for oil prices, which again headed towards US$100 a barrel. This is a huge red flag for stock prices, but it could get worse, as CNBC warned us: “Oil prices extended gains following the statement, read out by a state TV broadcaster,” the news service revealed. “The shipping of oil through the Strait of Hormuz has effectively stopped since the war began, causing global oil prices to soar. Iran warned on Wednesday that the price per barrel could climb to $200”.
If that happened, stock prices would plummet and then becomes a big concern for President Donald Trump’s big gamble to bring Iran to its knees via extensive bombing alongside Israel.
Hopefully, the Iran war will soon be over, and all stock market players and super fund investors should be praying for that, not only for the sake of the lives that may be lost, but for hip pocket reasons.
However, the threat of AI won’t go away. While it will deliver many positives, the threats to jobs and many businesses will be ongoing. One could see this AI revolution driven by tech geniuses as the 1984 movie Revenge of the Nerds.
But there’s an ironic twist because some of the big job losers will be the tech experts themselves!
By the way, news.com.au did reveal how the workers were paid as they left the building: “Impacted staff will receive a minimum 16-week global separation package with one week additional for each year of service.”
