Eric Schmidt believes AI could let large companies run with fewer employees. The former Google CEO said businesses could spend less time coordinating work, potentially eliminating roles focused on planning and administration. Speaking to Nicolai Tangen on the In Good Company podcast, he illustrated his argument with a hypothetical company employing 10,000 people.“My guess is you’ve got a couple of thousand people who you don’t need,” Schmidt said. He urged employers to manage those transitions “legally and humanely”. Describing an unnamed friend’s decision to cut a fifth of his workforce, Schmidt called those affected “The glue people”, the ones who handled planning and moved numbers around. His comments offered an estimate of possible staffing changes, not a finding that every large business could eliminate the same proportion of jobs.
Why Eric Schmidt thinks AI could reduce management work
Schmidt said coordinating thousands of employees is inefficient. He remembered saying his job was sitting in meetings for twelve hours a day, five days a week, plus working weekends.“Much of that coordination tax can be eliminated by these AI platforms,” he said.The “coordination tax” refers to the time and effort spent organizing work between people and departments. Schmidt expects business AI systems to reduce that burden, allowing companies to operate with fewer staff.But he clarified that businesses still needed inventors, salespeople, leaders and employees who talk to governments. He said those responsibilities differ from administrative work, which he thinks AI could absorb.
The unnamed company that cut 20% of its workforce
Schmidt cited a friend whose company was growing rapidly but nevertheless decided to lay off 20% of its employees. According to Schmidt, the executive had written about the decision in The Wall Street Journal and later told him he had received death threats.Schmidt described the affected employees as “the people who were doing sort of planning and moving numbers around and so forth.”He said the company still needed people to sell its services, build products, and speak to regulators. He did not identify the executive or company in the relevant passage, and the example does not establish that other employers would achieve comparable results.
Companies may resist the changes AI requires: Eric Schmidt
Earlier in the interview, Schmidt questioned whether established businesses would reorganize themselves sufficiently to benefit from AI.“Almost none of the companies that are listening to this will actually do the necessary changes in their culture,” he said.He argued that companies organize themselves around familiar beliefs and predictable routines. Adopting AI would therefore require changes to how work is structured and managed, alongside the introduction of new software.
