Speaking to Nicolai Tangen on the In Good Company podcast, he illustrated his argument with a hypothetical company employing 10,000 people.
The former Google CEO said businesses could spend less time coordinating work, potentially eliminating roles focused on planning and administration. Eric Schmidt believes AI could let large companies run with fewer employees.
Schmidt cited a friend whose company was growing rapidly but nevertheless decided to lay off 20% of its employees.
“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. Schmidt said coordinating thousands of employees is inefficient. “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. He said those responsibilities differ from administrative work, which he thinks AI could absorb. The executive had written about the decision in The Wall Street Journal and later told him he had received death threats, according to Schmidt. He said the company still needed people to sell its services, build products, and speak to regulators. “Almost none of the companies that are listening to this will actually do the necessary changes in their culture,” he said.
His comments offered an estimate of possible staffing changes, not a finding that every large business could eliminate the same proportion of jobs. He remembered saying his job was sitting in meetings for twelve hours a day, five days a week, plus working weekends. 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. Schmidt described the affected employees as “the people who were doing sort of planning and moving numbers around and so forth. 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.
Earlier in the interview, Schmidt questioned whether established businesses would reorganize themselves sufficiently to benefit from AI.
Adopting AI would therefore require changes to how work is structured and managed, alongside the introduction of new software. You use AI every day. He argued that companies organize themselves around familiar beliefs and predictable routines. Now get your AI Quotient. Take the AIQ test.