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

AI’s biggest champions have argued for some time that the technology will usher in an era of unprecedented productivity gains, richly rewarding workers who harness it while displacing those who don’t.

Zeb Evans, CEO of the collaboration software startup ClickUp, claims that this shift is imminent. Last Thursday, Evans announced on X that the company, which was last valued in 2021 at $4 billion, had laid off 22% of its workforce yet characterized that reduction as not a cost-cutting measure, but rather a radical embrace of AI that will propel the company to the next level.

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

ClickUp recently introduced roughly 3,000 internal AI agents to handle a wide range of complex tasks on behalf of its employees, according to a Fortune article published several days ago. Instead of performing the work themselves, staff members are now expected to direct these agents and ultimately review the output to ensure it meets the company’s standards.

Evans’s goal, according to his X post, is for AI to turbocharge ClickUp into a “100x org.”  

ClickUp is not alone in its hope that AI agents will provide massive productivity gains.

In fact, according to a recent Gartner survey, 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. Not only is ClickUp measuring those efficiencies internally, but it’s also apparently 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.

In recent months, a growing number of companies have started monitoring employee token consumption, using it as a metric to see who is actually adopting AI tools. But critics argue that “tokenmaxxing”—as this concept is known—is the wrong 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 functions well.

Tech circles have long theorized about this scenario.

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.