This $4 Billion Startup Just Laid Off 22% of Employees — So It Can Offer Remaining Staff $1 Million Salaries

Productivity software startup ClickUp has cut jobs, recently laying off 22% of its 1,300-person workforce as part of an AI-focused restructuring. 

Now, in the aftermath of layoffs, ClickUp CEO Zeb Evans is making a bold promise: He is offering employees who remain a chance to earn up to $1 million a year in base salary.

“This wasn’t about cutting costs,” Evans wrote on X about the layoffs. “Most savings from this change will flow directly back into the people who stay. We’ll be introducing million-dollar salary bands.”

Evans said this is part of a new compensation model that ties closely to performance. The idea is simple: Employees who deliver exceptional outcomes with AI could see their pay rise sharply. Those who do not meet expectations may not benefit from the new structure. The goal is to reward top talent and push productivity higher.

“If you create outsized impact using AI, you’ll be paid outside of traditional bands,” Evans wrote in his X post. 

Why ClickUp underwent layoffs

The layoffs at ClickUp follow a prolonged push to integrate AI across its platform and internal operations. Over the past several months, the company has accelerated its use of AI to automate tasks, streamline decision-making and unify how teams manage work, per Business Insider. 

ClickUp is pushing aggressively to embed AI into everyday work, and that shift is coming directly from leadership. Andy Cabasso, a growth operations manager at the company, recently told Business Insider that there is a clear internal mandate to expand the use of AI agents across teams. Employees are expected to not only use these tools, but also to build, refine and share them with others. 

Cabasso said he currently oversees 37 AI agents that help handle a wide range of operational tasks. These agents assist with duties like analyzing data and reviewing meeting transcripts. Instead of doing each task manually, he manages and improves the systems that execute them. 

As a result of ClickUp prioritizing AI, functions that once required larger teams now need fewer people, Evans wrote on X. This shift has allowed ClickUp to operate with greater efficiency, but it has also reduced the need for certain roles, Evans added. 

The layoffs reflect this transition. Evans framed the move as part of a broader strategy to build a leaner organization that relies more on technology than headcount.  

Other tech companies have undergone layoffs this year

ClickUp’s layoffs are part of a wider shift across the tech industry. Companies are cutting large numbers of jobs at once, while at the same time paying huge salaries to a small number of AI experts.

Meta is one of the clearest examples. Over the past year, it has spent heavily to recruit AI researchers and engineers, at one point reportedly offering $100 million signing bonuses. At the same time, the company laid off more than 8,000 employees last week. 

ClickUp’s valuation hit $4 billion in late 2021 after a $400 million funding round.