Across the ocean, Intuitive Surgical, the parent company of the Da Vinci robot, announced the layoff of over 300 production line employees right after delivering an almost perfect financial report.
Meanwhile, the winds of policy are strong around us. The Minister of Industry and Information Technology has clearly stated that during the 14th Five-Year Plan period, the development of artificial intelligence and robotics industries should be accelerated. In the capital market, domestic companies represented by minimally invasive robots have also seen a remarkable rise in stock prices over the past month.
On one side, we see the contraction of industry giants, while on the other, the local market is thriving. What seems like a contradiction of two extremes hides what kind of business logic?
Today, we will discuss the trends and future we can observe from the layoffs at Intuitive Surgical.
First, who are the ones being cut by the surgical knife of the robotics giant?
Let’s first look at Intuitive Surgical. Any organization undergoing surgery is very particular about where to cut.
Among the 331 employees laid off, more than two-thirds are assembly technicians, along with production line supervisors, trainers, etc. In simple terms, these are the hands on the production line. The official statement is to optimize production operations and provide internal transfer opportunities. It sounds like a routine operation.
This is a key clue. Why specifically target the hands? Behind this is the three calculations made by the management of Intuitive Surgical.
First Calculation: Value = Muscle + Brain
Imagine, 20 years ago when you bought a car, what did you look for? The horsepower of the engine, the smoothness of the transmission, the craftsmanship of the chassis. These are all muscle.
Today, when you buy a car, you might be more concerned about whether it has an intelligent cockpit, whether it can park itself, and how smart the driver assistance is. These are all brain.
The value of cars is shifting from muscle to brain.
The same goes for surgical robots. In the past, the value of a surgical robot was mainly in its precise mechanical arms, which is muscle. But in the future, its value will increasingly depend on software algorithms and data analysis, which is brain.
The layoffs at Intuitive Surgical are essentially reallocating some of the funds spent on muscle to invest more heavily in brain. You see, while they are cutting assembly workers, they are simultaneously hiring a large number of AI and machine learning experts—LinkedIn data shows that 42% of the positions released in the past six months are related to this.
This is not a contraction; this is a value exchange aimed at the future.
Second Calculation: Growth = Expanding New Customers + Serving Old Customers
When the global installed base exceeds 10,000 units, Intuitive must consider a new question: Where is the second curve of growth?
The space for acquiring new customers is shrinking; how can we make each installed machine operate more frequently, consume more consumables, and generate more valuable data?
When the business model changes, the company’s capability requirements must also change. In the past, strong production capacity was needed to expand the market; now, extreme operational efficiency is required to serve over 10,000 old customers, ensuring they use the machines more frequently and consume consumables.
Therefore, streamlining the production line is to make the entire company leaner and more efficient to adapt to this new growth formula.
Third Calculation: Competition = Leading Position + Continuous Evolution
In the business world, if you do not advance, you retreat. As the industry leader, its cumulative surgical volume and clinical database are several times that of its competitors. Intuitive Surgical must actively evolve in the face of competition from Medtronic, Stryker, and others.
This round of layoffs is like a top boxer, during the break in the match, actively shedding excess fat to make the muscles leaner and punches more powerful.
This is a form of defensive offense, aimed at ensuring that you are always half a step ahead of your competitors.
Final Thoughts
This incident also gives each of us a profound insight:
Will the skills you rely on today for survival be the costs that the company wants to cut tomorrow?
Are you continuously exercising your muscles day after day, or are you investing in that brain that no one can take away from you?