CEOs: Smaller Workforces as a Sign of Corporate Health, WSJ

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June Zaccone

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Jul 30, 2025, 1:16:51 PMJul 30

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CEOs Trumpet Smaller Workforces as a Sign of Corporate Health

Bosses aren’t just unapologetic about staff cuts. Many are touting shrinking head counts as accomplishments in the AI era.

Chip Cutter July 27, 2025

Big companies are getting smaller—and their CEOs want everyone to know it.

The careful, coded corporate language executives once used in describing staff cuts is giving way to blunt boasts about ever-shrinking workforces. Gone are the days when trimming head count signaled retrenchment or trouble. Bosses are showing off to Wall Street that they are embracing artificial intelligence and serious about becoming lean.

After all, it is no easy feat to cut head count for 20 consecutive quarters, an accomplishment Wells Fargo’s chief executive officer touted this month. The bank is using attrition “as our friend,” Charlie Scharf said on the bank’s quarterly earnings call as he told investors that its head count had fallen every quarter over the past five years—by a total of 23% over the period.

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The shift reflects a cooling labor market, in which bosses are gaining an ever-stronger upper hand, and a new mindset on how best to run a company. Pointing to startups that command millions in revenue with only a handful of employees, many executives see large workforces as an impediment, not an asset, according to management specialists. Some are taking their cues from companies such as Amazon.com, which recently told staff that AI would likely lead to a smaller workforce.....

Large-scale layoffs aren’t the main way companies are slimming down. More are slowing hiring, combining jobs or keeping positions unfilled when staffers leave. The end result remains a smaller workforce.....

Some reductions might have little to do with adoption of the technology and more with executives’ desire to please investors. Efforts to reduce head count or restrain hiring show that an executive has a willingness to make tough calls, Sloane’s Mukewa said. ....