If You Have to Cut Jobs, HubSpot Just Showed What Good Looks Like
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Two well-known companies cut white-collar jobs this week, and both pointed to how they’re organized.
Amazon confirmed a “small number” of job cuts, mainly in its Stores unit, the part of the company that operates its main shopping site. A person familiar with the matter told Reuters fewer than 1,000 white-collar workers were let go in the U.S., India, and the U.K. Business Insider reported the layoffs first. Internal Slack posts that affected employees shared with Reuters suggested customer service and selling partner services were among the teams hit. An Amazon spokesperson said the company had “adjusted parts of our Stores business” and believes the new structure will better support its priorities.
The cuts landed during Prime Big Deal Days and follow a 30,000-job corporate reduction that began last year and ran into January. Jeff Bezos told Fox News the continued cuts are needed because Amazon overhired during the pandemic, when people “were staying home and they were ordering.” The company, he said, “really grew our head count.”
HubSpot is cutting about 7% of its team, nearly 660 employees, according to an October 6 message from CEO Yamini Rangan. She said the company has moved from building software that helps customers grow to delivering outcomes with AI, and has to reorganize to compete. Product teams will be organized around customer goals like generating demand or winning deals instead of around product hubs, and teams get clearer ownership. “We will reduce management layers and move decisions closer to the people doing the work,” Rangan wrote.
She was direct about what did not drive the decision: “This is not driven by AI-related efficiencies.” She also said the cuts are not simply a cost exercise, and that headcount will keep growing more slowly than revenue. Every role was assessed against 6 criteria: strategic need, layers and spans, revenue generation, capability, capacity, and leadership fit.
HubSpot sells AI-powered customer software, so its description of an AI-driven strategy is also a product pitch. Its denial is narrow, too. Rangan rules out AI-related efficiencies as the cause of the cuts, while the strategy behind the reorganization centers on AI-driven outcomes for customers.
Departing employees get 20 weeks of base pay plus 1 week per year of service, up to 30 weeks, along with 5 months of health coverage and 6 months of career transition services. They keep their laptops and home office gear. U.S. employees heard by email within 15 minutes and can have a one-on-one conversation with a manager.
Neither company blamed AI efficiencies for the cuts. Amazon pointed to structure, Bezos pointed to pandemic overhiring, and HubSpot pointed to a new strategy and a flatter org chart. “Fewer layers” and “faster decisions” have become standard language when companies explain cuts.
If you manage people, both explanations come down to fewer people in the middle. Middle management has been the soft spot in most of the restructurings I’ve watched this year, and these two fit the pattern. Workday’s second round of cuts this year followed the same logic of moving headcount toward whatever the company is betting on next.
HubSpot deserves credit for how it handled the exit. Up to 30 weeks of pay, 6 months of outplacement, and a one-on-one conversation with a manager is the standard to measure yourself against if you have to cut people.
Keep the scale in perspective, too. The two cuts combined total fewer than 1,700 people, and the jobless claims data below show layoffs across the economy near a 12-month low. If you’re rebuilding a team after a restructure, talk to us about hiring. And if you’re one of the people affected, see what’s open right now.
Staffing your team doesn’t have to be hard.
Reach out and see how we can help.
Jobless Claims Fell by 2,000, but Only Because Last Week Got Revised Up
First-time unemployment claims came in at 197,000 for the week ending October 3, down 2,000 from the week before, according to the Department of Labor. Read the drop carefully. Last week’s figure was first reported at 197,000 and later revised up to 199,000, so this week’s number matches last week’s original report and the entire decline comes from the revision.
The 4-week average fell 2,500 to 198,000, the lowest 4-week average in the 12 months of data in the release. The next-lowest reading was 199,000 on August 1. A year ago, initial claims were 233,000, so this year’s figure is about 36,000, or 15%, lower.
Continuing claims rose 17,000 to 1,716,000 for the week ending September 26. Their 4-week average fell 12,250 to 1,711,000, also the lowest of the past year, and a year ago continuing claims stood at 1,929,000. The insured unemployment rate held at 1.1%, down from 1.3% a year ago.
Before seasonal adjustment, raw filings rose 7.6% to 170,333, while the seasonal formula expected an 8.7% rise. State figures lag the national number by a week. For the week ending September 26, Michigan (+739) and Nevada (+167) had the biggest increases, and Hawaii (-1,172), New York (-819), and Illinois (-625) had the biggest drops. For the week ending September 19, New Jersey (2.0%) and Washington (1.8%) had the highest insured unemployment rates.
Layoffs are about as low as they’ve been all year. Both 4-week averages, initial and continuing claims, sit at their lowest point in the past 12 months, and 213,000 fewer people are collecting unemployment than a year ago. A 17,000 bump in one week doesn’t change that picture, and I made the same point when claims hit a low two weeks ago.
For employers, a low-layoff market means the people you want to hire already have jobs. You’ll have to recruit them away from somewhere, and that takes a real reason to move: more money, a better role, or a better boss.
Your AI Business Case Probably Leaves Out the Costs HR Would Catch
Gartner says only 38% of CHROs and CIOs share an understanding of how AI will change work. The finding came out at Gartner’s HR Symposium in London on October 7. The press release gives no sample size, survey dates, or methodology, so I’d read 38% as Gartner’s headline number and wait for the details.
Rachel Juley, a Senior Director Analyst in Gartner’s HR practice, said: “Organizations have made significant progress implementing AI, but many continue to struggle to realize meaningful value.” Her argument is that the fix depends on HR and IT working together: “Success increasingly depends on how effectively CHROs and CIOs collaborate to prepare the enterprise for AI transformation.”
Gartner listed 4 things HR leaders should know about CIOs:
- CIOs are becoming “accidental talent leaders.” AI moves faster than HR’s usual workforce planning, so decisions about worker readiness and change management end up in technology projects. Gartner says HR should embed its own people on AI project teams and coach them on skills maps and AI literacy programs.
- CIOs face a “leadership identity crisis.” They’re increasingly accountable for AI results, but the capabilities needed to deliver them are spread across many executives. Gartner’s fix is shared ownership and shared metrics.
- CIOs focus on the most visible AI costs. Business cases usually count technology spending and leave out workforce costs: AI talent pay and retention, productivity, engagement, and employer brand.
- CIOs lack confidence to lead AI transformation end to end. Gartner says the biggest barriers to AI value are now non-technical, and it wants HR to act as AI strategy partner, workforce planner, transformation driver, and organizational designer.
Gartner sells research and advisory services to the same CHROs and CIOs it surveys, and its core recommendation, more HR involvement in AI projects, favors its HR audience. The recommendation still holds up on its merits.
The third point is the one I’d pay attention to. Most AI business cases I see compare the software cost to the headcount it might replace. They leave out what it takes to retrain people, the productivity dip while teams adjust, and the good employees who leave because nobody explained what their job turns into. Those costs land on the people side of the business, and if HR isn’t in the room when the business case gets built, they never show up in it.
The 38% measures shared understanding, and IBM’s September data fills in the rest. 46% of organizations did not involve the CHRO in AI strategy, and only 28% of CHROs had a joint roadmap with IT. When the AI plan and the people plan come from different departments, employees feel it first.
Before the next AI purchase gets approved, ask who built the business case and whether anyone priced retraining, turnover, and engagement. If a rollout leaves you short on the skills or the people to staff it, explore our staffing services.
