ServiceNow has linked the gradual decline in its overall workforce to productivity gains from artificial intelligence, signalling how companies deploying AI are beginning to rethink hiring needs and the size of their teams.
During its third-quarter earnings call, Bill McDermott, chairman and CEO described the company’s slightly lower headcount as a positive outcome, attributing it to employees delivering more with fewer resources. The company’s leadership indicated that AI-led efficiencies are allowing it to limit recruitment in certain functions, even as it continues to add employees in areas tied to growth.
Gina Mastantuono, president and CFO, ServiceNow, said the company’s internal use of its AI products had generated more than $1 billion in annualised efficiency gains. These savings, she indicated, have reduced the need to hire at the same pace. The impact, however, has not been uniform across the organisation. While the number of quota-carrying sales employees has increased by double digits, staffing in sales operations has fallen significantly.
The company’s comments offer a direct example of how AI adoption is influencing workforce planning beyond the technology sector’s usual promises of automation and productivity. Rather than announcing a broad workforce reduction, ServiceNow is describing a shift in how work is distributed, with fewer employees required in some support functions and continued hiring in roles that contribute directly to business expansion.
The remarks came alongside a mixed third-quarter performance.
The workforce comments are particularly significant because ServiceNow sells AI tools to organisations seeking similar productivity gains. Its own operating model, therefore, offers an example of the workforce changes it is encouraging customers to consider: using automation to reduce manual work, improve operational efficiency and alter hiring requirements.
The company’s approach points to a more selective model of workforce expansion, in which AI-driven efficiencies may reduce staffing requirements in certain functions while demand for specialised and revenue-generating roles continues to support recruitment. For employers, the emerging question is increasingly not just how much AI can improve productivity, but how those gains will reshape the composition and size of the workforce.
