CEO Ryan Cohen revealed that GameStop went from over 1,400 corporate employees to just 400, yet became more productive. He argues large corporate teams create bloat, perverse incentives, and delegation of work. The radical downsizing improved focus and business results.

A pragmatic way to fund expensive AI tools is to reallocate the budget from headcount that leaves through natural attrition. When a GTM role departs, use their budgeted salary to fund AI agents that can scale the work of the remaining team, avoiding new budget requests and the need to fire performers.

When Trello's PMM team shrank from ten members to two, the crisis forced them to build robust systems for tracking projects, assessing bandwidth, and prioritizing tasks. This extreme constraint became the necessary catalyst for developing a more strategic and organized workflow out of sheer survival.

During its growth phase, SpeedSize made the counterintuitive decision to reduce its headcount by 50%. This pivot created a leaner, more efficient organization where the engineering team grew from less than 50% to 70% of the company, now supporting $6M in ARR.

The true ROI of AI lies in reallocating the time and resources saved from automation towards accelerating growth and innovation. Instead of simply cutting staff, companies should use the efficiency gains to pursue new initiatives that increase demand for their products or services.

AI allows companies to suppress their 'hunger' for new hires, even as revenues grow. This breaks the historical correlation where top-line growth required headcount growth, enabling companies to increase profits by shrinking their workforce—a profound shift in corporate strategy.

Contradicting the common startup goal of scaling headcount, the founders now actively question how small they can keep their team. They see a direct link between adding people, increasing process, and slowing down, leveraging a small, elite team as a core part of their high-velocity strategy.

Coastline Academy frames AI's value around productivity gains, not just expense reduction. Their small engineering team increased output by 80% in one year without new hires by using AI as an augmentation tool. This approach focuses on scaling capabilities rather than simply shrinking teams.

AI is breaking the traditional link between headcount and revenue. McKinsey is growing its client-facing workforce by 25% while simultaneously shrinking its non-client-facing staff by 25%, achieving a 10% increase in output from the shrinking group.