Ex-Google CEO Schmidt Warns AI Could Eliminate 20% of Jobs at Large Companies

Former Google chief executive Eric Schmidt believes that as artificial intelligence takes over administrative and managerial tasks, large corporations could operate normally with roughly 20% fewer employees.

Using a hypothetical company with 10,000 staff as an example, Schmidt said: "My guess is that several thousand of them are actually not needed."

Speaking with Nicolai Tangen, head of Norway's sovereign wealth fund, on a podcast aired this week, Schmidt pointed out that when employee positions become unnecessary, companies must find ways to complete the workforce transition in a "legal and humane" manner.

AI may eliminate corporate management layers

Schmidt believes that large enterprises waste enormous amounts of time coordinating work among employees, departments, and managers. He recalled that during his time leading Google, he spent 12 hours a day attending various meetings. He believes that AI agents are expected to eliminate most of this coordination work.

"These AI platforms can eliminate most of these 'coordination costs,'" he said.

He said companies will still need outstanding inventors, salespeople, leaders, and employees responsible for dealing with the government.

Schmidt mentioned a friend who cut 20% of staff while the company's business was growing rapidly. Schmidt said these layoffs targeted so-called "glue employees" — those engaged in "some kind of planning work, responsible for deploying data."

The executive later told him that he had received death threats. Schmidt did not disclose the friend's name, but mentioned that he had written an article in the press about these layoffs. This description closely matches Cloudflare CEO Matthew Prince, who wrote an article explaining the reasons for his company's layoffs.

Despite a 34% increase in revenue, Cloudflare still announced plans in May this year to cut more than 1,100 jobs as part of the company's transition toward artificial intelligence. Prince described most of the laid-off employees as "measurers" — those responsible for management, compliance, and administrative work.

In an interview in September, Prince mentioned that previously a team of about 20 people would spend two weeks preparing investor-related documents before earnings releases. He said artificial intelligence shortened this process to just three minutes.