What ClickUp's mass layoff tells us about the future of work

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The biggest champions of artificial intelligence have long argued that the technology will bring about an era of unprecedented productivity gains, rewarding workers who harness it and displacing those who don't. Zeb Evans, CEO of collaboration software startup ClickUp, claims that this shift is imminent. Last Thursday, Evans announced on X that the company, valued at $4 billion in 2021, had laid off 22% of its workforce.

However, he characterized the reduction not as a cost-cutting measure, but rather as a radical embrace of AI that will propel the company to the next level. Evans wrote that most savings from the change will flow directly back into the people who stay. He announced plans to introduce million-dollar salary bands, saying that if employees create an outsized impact using AI, they'll be paid outside of traditional bands.

ClickUp recently introduced around 3,000 internal AI agents to handle complex tasks on behalf of its employees. Instead of performing the work themselves, staff members are now expected to direct these agents and review the output to ensure it meets the company's standards. Evans's goal is for AI to turbocharge ClickUp into a '100x org.' The company is not alone in its hope that AI agents will provide massive productivity gains.

A recent Gartner survey found that about 80% of companies using autonomous tech have cut jobs. However, the study found that workforce reductions aren't necessarily translating into meaningful financial returns. While Gartner's findings suggest some companies use 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. The company is measuring those efficiencies internally and gearing up to include them in a forthcoming product for its customers. 'Instead of gamifying token cost, we gamify value created and time saved,' Evans wrote.

The scenario ClickUp is pursuing has long been theorized in tech circles. One extreme example of a high-profile startup using AI automation to the max 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 is apparently paying off: Polsia just raised $30 million at a $250 million valuation.