ClickUp Mass Layoff Signals a Shift in the Future of Work

AI's most vocal proponents have long argued that the technology will bring about an era of unprecedented productivity gains, richly rewarding those who harness it while displacing those who do not.

Zeb Evans, CEO of collaboration software startup ClickUp, says this shift is imminent. Last Thursday, he announced on X that the company—valued at $4 billion in its last 2021 funding round—had laid off 22% of its workforce. He framed the reduction not as cost-cutting, but as an aggressive embrace of AI that will propel ClickUp to the next level.

"Most of the savings from this change will flow directly back to the people who remain. We’ll be introducing million-dollar salary bands. If you create outsized impact using AI, you’ll be paid outside traditional bands," Evans wrote.

According to a recent Fortune article, ClickUp has deployed roughly 3,000 internal AI agents to handle a wide range of complex tasks on behalf of its employees. Now, instead of performing the work themselves, staff members are expected to direct these agents and then review the output to ensure it meets company standards.

Evans's goal, as stated in his X post, is for AI to turbocharge ClickUp into a "100x organization."

ClickUp isn't alone in hoping that AI agents will deliver massive productivity gains.

In fact, a recent Gartner survey found that about 80% of companies using autonomous technology have cut jobs. However, the study also showed that these workforce reductions aren't necessarily translating into meaningful financial returns.

While Gartner's findings suggest some companies are using unproven AI as an excuse to downsize, ClickUp maintains it is not one of them.

Evans told TechCrunch via email that the startup is indeed seeing productivity gains from AI agents. ClickUp is not only measuring these efficiencies internally, but also appears to be preparing to incorporate them into an upcoming product for its customers.

"Instead of gamifying token cost, we gamify value created and time saved," Evans wrote.

In recent months, a growing number of companies have begun monitoring employee token consumption as a metric to see who is actually adopting AI tools. But critics argue that "tokenmaxxing"—as this practice is known—is a misguided metric because it simply racks up AI expenses.

"The people that automate their jobs with AI will always have a job," Evans claimed in his post. But if AI keeps taking over more tasks, ClickUp will eventually need fewer and fewer people, eliminating those who fail to automate their own functions well.

Tech circles have long speculated about this scenario.

One extreme example of a high-profile startup fully leveraging AI automation already exists. Polsia, a one-year-old startup that claims to handle all software operations for solopreneurs, is run by just one person: its founder and CEO, Ben Broca. That efficiency appears to be paying off: Polsia just raised $30 million at a $250 million valuation.