Former Google CEO Schmidt: AI Eliminates Coordination Costs, Large Companies Can Operate Normally Even After Cutting 20% of Staff

Cailian Press Financial News Agency

Open APP

Former Google CEO: AI will eliminate massive coordination costs; large companies can operate as usual even with 20% fewer jobs

Cailian Press, Zhou Ziyi, Editor: Lin Qi, 2026-10-22 15:15

① Former Google CEO Eric Schmidt believes that as artificial intelligence takes over administrative and management functions, large companies can operate as usual even with 20% fewer jobs; ② Schmidt said these AI platforms can eliminate a large portion of coordination costs; ③ In addition, on the prediction market platform Kalshi, traders also expect corporate layoffs to expand further.

Cailian Press, October 22 (Editor: Zhou Ziyi) — Former Google CEO Eric Schmidt believes that as artificial intelligence (AI) takes over administrative and management functions, large companies can operate as usual with about 20% fewer employees.

On a podcast program, Schmidt, speaking about a hypothetical company with 10,000 employees, noted, "My guess is that you probably have as many as a few thousand employees who are not really needed." However, he also cautioned that companies must find ways to "legally and humanely" place employees who need to be reassigned or leave because their positions are no longer necessary.

Schmidt pointed out that large companies waste a great deal of time coordinating work among employees, departments and managers.

He recalled that during his time running Google, he spent 12 hours a day attending various meetings. In this regard, he believes AI agents can eliminate most of that coordination work: "These AI platforms can eliminate a large portion of 'coordination costs.'"

He added that companies still need outstanding inventors, salespeople, leaders, and employees responsible for liaising with the government.

Schmidt also mentioned a friend on the program, saying that this person cut 20% of staff while the company's business was growing rapidly, and noted that the layoffs targeted so-called "glue people," namely those mainly responsible for "planning and processing data."

Schmidt did not disclose the friend's name, but the description closely matches the situation of Cloudflare CEO Matthew Prince. Prince previously published an article explaining his company's layoff measures.

Although Cloudflare's revenue grew 34% in the first fiscal quarter, it still announced plans in May to cut more than 1,100 positions, a move seen as part of the company's strategy to transition toward artificial intelligence.

Prince mostly categorized the laid-off employees as "measurers," namely employees responsible for management, compliance and administrative work.

In an interview in September, Prince mentioned that a team of about 20 people previously needed two weeks to prepare investor-related documents before an earnings release. With the help of artificial intelligence, that process now takes only three minutes.

Layoffs may expand further

In addition, prediction markets also expect layoffs to expand further. On the prediction market platform Kalshi, traders believe there is about a 94% probability that layoffs in the U.S. information industry in 2026 will exceed the 2025 level.

However, Schmidt also expressed doubt about whether most established companies can carry out the necessary organizational changes to fully leverage the productivity gains brought by artificial intelligence. He said, "Of the companies that listen to these views, almost none will actually make the necessary corporate culture changes."

Global Market Intelligence

U.S. Stock Market Dynamics

Cailian Press statement: The content of this article is for reference only and does not constitute investment advice. Investors who act on it do so at their own risk.

Business Cooperation

Popular Unlocks

[Intraday Treasure] Driven by energy transition policies, demand at home and abroad in this field continues to be released, and this company's related products have been applied in multiple projects

Driven by energy transition policies, demand at home and abroad in this field continues to be released. Domestic industry chain companies have mature products and channel advantages, and this company's related products have been applied in multiple projects.

[Trend Research Report · Company] Materials leader expands into 3D printing; analysts strongly highlight that the company's related business has entered the supply chains of multiple leading rocket companies, and with fundraising project capacity about to be released, profit elasticity is considerable

As a leading company in a domestic niche materials segment, the company's products cover high-end fields such as aerospace, rail transit and new energy vehicles, and it is based domestically while increasing overseas investment. The profit elasticity from subsequent capacity release is considerable. In addition, the company has entered emerging tracks such as 3D printing through subsidiaries. The core business of the relevant company is DED metal 3D printing/additive manufacturing, and it has entered the supply chains of multiple leading rocket companies, potentially creating a new growth curve.

① The data paradigm required for embodied AI in robots is extremely complex and massive, with 40% of pre-training being EGO data. These two companies have each taken stakes in leading domestic Ego data collection companies; ② Pre-training data is far larger than post-training data, and simulation data supplements Ego data in pre-training. These two companies are leading domestic simulation data collection companies; ③ Robot products are expected to enter a large-scale commercialization phase over the next three to five years starting in 2026, and may first scale up in industrial scenarios. Companies with industrial robot business capabilities are expected to see performance improvements.

Related Reading

Is the gold bull market not over? BlackRock: Governments around the world are deeply in debt, and the "good days" are still ahead!

Cailian Press, Huang Junzhi, 2026-10-22 15:00

① BlackRock believes that as systemic problems such as swelling debt, runaway deficits and currency depreciation worsen, gold will continue to rise; ② BlackRock remains bullish on the long-term trend of gold prices, but expects that in the short term, gold prices will fluctuate further due to changes in monetary policy expectations and interest rates.

Seventy percent of websites worldwide face threats! A critical PHP vulnerability runs rampant, and companies in multiple countries take sites offline overnight

Cailian Press, Xiaoxiang, 2026-10-22 14:39

① Because a widely used programming language exposed a major security vulnerability, governments and companies in multiple Asian countries are urgently investigating and reinforcing their websites; ② Previously, as PHP developers began releasing emergency patches on Wednesday, a wave of preventive website shutdowns had already swept across Europe and the United States.

Bank of Korea: Chip boom continues to boost the economy, chip prices expected to rise further

Cailian Press, Liu Rui, 2026-10-22 12:59

① The Bank of Korea kept its benchmark interest rate unchanged at 3.00% and raised its economic growth forecast; ② The semiconductor upcycle remains strongly momentum-driven, and as growth dividends spill over to other industries, South Korea's economy is expected to maintain a high-growth trajectory; ③ Robust semiconductor exports will support South Korea's current account surplus at a high level, with a scale better than earlier expectations.