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Klaviyo laid off roughly 100 employees last week. Reflexively, it looks like cost cutting. Layoffs are still common across tech, so it’s easy to slot this into the same narrative. But the announcement came from product and engineering leadership, and it only affected R&D. The company is reshaping teams to emphasize AI and technical skills. This isn’t a generic cost cut.
Look at what’s happened across the SaaS industry. Airtable told teams to cancel meetings for a week so they could play with AI, and Howie Liu is openly leaning into the idea of the “IC CEO.” Intercom, under Eoghan McCabe, churned through about 40% of staff in a wrenching pivot to become AI first. Both learned the hard way. Klaviyo looks like it’s trying to get ahead of that curve.
The Martech Reset
AI is reconfiguring Martech. Yamini Rangan, HubSpot’s CEO, recently argued that while the old growth formula hasn’t changed, the levers have shifted. AI is siphoning some top-of-funnel traffic, but it’s also pre-qualifying intent and improving on-site conversion. Translation: The winners will restaff toward first-party data, intent modeling, and conversion-rate craftsmanship.
If conversion is the new lever, R&D has to ship AI-driven relevance—faster experiments, better intent models, tighter data loops.
But What About the People
Retooling sometimes means hiring the people you need now, not waiting for existing teams to catch up. It’s cold. It’s ruthless. But it can also be the more empathetic path. Better to be looking for jobs in the summer than over the holidays, and better to be looking when demand is still there.
This isn’t new. Netflix cut teams when it shifted from data centers to the cloud, while offering generous packages. Snowflake rightsized continuously and dodged the post-pandemic layoff wave. The lesson is simple: Companies that make tough decisions early, even when it stings, come out stronger.
None of this erases the human cost. A layoff is an explosion. One job lost ripples out to a family, and the second- and third-order effects can last for years. That’s the part leaders should never forget.
Finally: What You Must Do
Years ago, I wrote about the one spreadsheet every manager should keep, a model for what you’d do if asked to cut 15%, 25%, or 40% of your budget. The point was simple: better to have an answer than scramble under pressure.
It’s time to update that exercise. Instead of cuts, ask yourself: What if I had to restaff my team for an AI future? Who would I keep? Who would I retrain? Who would I hire? Who would I let go? And then ask yourself: What’s stopping me from doing that right now?