What is the new normal for companies whose CEOs are fully committed to AI and are reducing headcount as a result? Just look at DeepL’s retrenchment memo.
The German AI translation startup recently cut around 250 people, more than 21% of its workforce. In a message posted on LinkedIn, founder Jarek Kutylowski ticked all the boxes on his memo for a new age of downsizing: smaller teams, fewer layers of management, more AI, and good old-fashioned “founder mode.”
Recent layoffs at companies like Block and Atlassian have followed a similar path. Here’s your layoff strategy. DeepL is the latest example.
Details of DeepL’s staff reduction memo
Kutilovsky introduced the layoffs at the beginning of his memo, calling them “the most difficult thing I’ve ever done in my career.” Before embarking on his own affairs, he thanked the staff he was laying off for their work.
“We are currently experiencing a massive structural shift in what jobs exist, who does them, and how many people it takes to do them well. That shift is thanks to AI,” Kutilowski wrote.
Kutylowski has appointed DeepL as the leader. Most companies are aware of AI-driven change, but few are acting on it, he writes. Companies that make moves like DeepL will “define the next decade,” he wrote.
Kutilovsky then cited one of the biggest buzzwords of our time: “AI native.” He wrote that AI needs to be embedded deep within the organization, similar to Jack Dorsey’s reorganization of the block.
“This removes the pressures from hierarchies and team boundaries that have plagued companies for decades, and allows smaller groups, or even individuals, to do work that once required entire teams,” Kutilowsky wrote.
That sounds familiar. Meta CEO Mark Zuckerberg said during Meta’s January earnings call that one employee can handle the work of a team using AI. Coinbase CEO Brian Armstrong also said in a memo that the company is experimenting with “one-person teams,” announcing a 14% reduction in its workforce and creating up to five management tiers under the executive team.
Kutylowski also discussed the need for smaller teams and fewer layers of management. So he came up with one of the technology industry’s favorite slogans for years: “Founder Mode.”
“To accelerate this transition, I am personally going deeper into founder mode,” Kutilowsky wrote, assembling “a small task force to more completely rethink how we build products” while putting “AI at the center of everything.”
Kutylowski is deeply committed to Silicon Valley culture. He announced in a memo that he plans to open an office in San Francisco.
Let’s play Layoff Madlib
You’re not alone. All termination memos are starting to look the same.
Companies like Block, Atlassian, and Snap all mentioned similar trends in messages to staff. Executives say companies need smaller teams and need to work more effectively with AI.
Linear co-founder Tuomas Artman teased the format in a post on Friday.
“This is not a cost-cutting effort or a reflection on anyone’s performance. We’re just rethinking every role for the agent AI era. We’re hiring. We’re not sorry about that,” Artman wrote of X.
Is AI really the culprit? Sam Altman said in February that some companies were “AI-washing” their layoffs. These companies are blaming AI for layoffs that would have occurred without it, he said.
Other executives like Kutilowsky say AI is fundamentally changing the way companies need to run.
“What does it take to operate as a durable global AI company at this pace of change? And is our company built for this?” Kucilovsky asked in the memo. His team’s honest answer was “no.”