Selecting natural attrition over layoffs
Nikesh criticises the workforce management approach of Coinbase CEO, Brian Armstrong, and Block CEO, Jack Dorsey, as automation becomes commonplace.
He says companies like these have reduced headcount drastically ‘because they’ve figured out there’s no redemption’.
“They say, ‘I can’t train these people. I’m going to just find the people who are going to come in and help me do this stuff,’” Nikesh says.
Palo Alto Networks uses natural attrition to gradually replace workers over time instead of opting for mass layoffs.
The firm has been hiring people for technical roles via hackathons. Nikesh estimates that within 12 months, the company will have transformed 20% to 25% of its entire team.
“Give me three years, I’ll have hopefully enough AI savvy people working at Palo Alto,” Nikesh says.
Reflecting this optimism, the firm has seen considerable growth. The company added 5,423 total employees to its headcount from the end of fiscal 2025 to Q3 2026, according to its most recent 10-Q filing.
