Former Google CEO Eric Schmidt believes large companies could operate with about 20% fewer employees as artificial intelligence takes over administrative and management tasks.
“My guess is you’ve got a couple of thousand people who you don’t need,” Schmidt said, referring to a hypothetical company with 10,000 employees.
Speaking to Nicolai Tangen, head of Norway’s sovereign wealth fund, on the In Good Company podcast, Schmidt warned that companies must find ways to “legally and humanely” transition employees whose jobs become unnecessary.
AI Could Eliminate Corporate Management Layers
Schmidt argued that large corporations waste enormous amounts of time coordinating work between employees, departments and managers.
He recalled spending 12 hours a day in meetings while leading Google, now part of Alphabet Inc. (NASDAQ:GOOGL). He believes AI agents could eliminate much of that coordination work.
“Much of that coordination tax can be eliminated by these AI platforms,” he said.
Companies would still need great inventors, salespeople, leaders and employees who deal with governments, he said.
Cloudflare’s Two-Week Job Now Takes Three Minutes
Schmidt described a friend who eliminated 20% of his company’s workforce despite rapid growth.
The cuts targeted “the glue people,” employees doing “sort of planning and moving numbers around,” Schmidt said. The executive later told him he had received death threats.
Schmidt did not name the friend but said he had written about the cuts in the Wall Street Journal.
That account closely matches Matthew Prince, CEO of Cloudflare Inc. (NYSE:NET), who published an essay explaining his company’s layoffs.
Cloudflare announced plans to cut more than 1,100 jobs in May, despite reporting 34% revenue growth, as part of its shift toward AI.
Prince described most of those laid off as “measurers,” employees handling management, compliance and administrative work.
In a September interview, Prince said a team of approximately 20 employees previously spent two weeks preparing investor documents before earnings.
AI reduced the process to just three minutes, he said.
Prediction Markets Expect More Layoffs
On Kalshi, traders assign roughly 94% odds that U.S. information-sector layoffs in 2026 will exceed 2025 levels, with approximately $31.5 million in trading volume.
Traders see that outcome as highly likely, although the market measures all information-sector layoffs, not only those caused by AI.
Schmidt doubts most established businesses will make the organizational changes needed to capture AI’s productivity gains.
“Almost none of the companies that are listening to this will actually do the necessary changes in their culture,” he said.
Kalshi and Benzinga have an existing data collaboration agreement.
Image: Shutterstock
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