Palo Alto Networks CEO Nikesh Arora says enterprises don’t have the workforces they need for the AI moment.
“The challenge right now is 90% of the enterprise employees are not AI savvy,” Arora said during a recent episode of the “20VC” podcast.
Arora said the issue is there’s no training course he can send his 21,000 employees at the cybersecurity firm to. It’s on them to level up and help the company that has a total market cap over $235 billion.
“They have to be able to learn on their own,” he said. “I think we’re back to a Darwinian moment where everybody has to figure out who’s really good.”
Other companies, Arora said, are facing this reality and choosing to respond with mass layoffs. The former top executive at Google and SoftBank specifically referenced Coinbase CEO Brian Armstrong and Block CEO Jack Dorsey.
“You’ve seen people like Brian Armstrong and Jack Dorsey go out and say, ‘I’m going to decimate my organization and I’m going to start building from scratch,'” Arora said. “And they’ve gone to some version of 30 to 40% less people because they’ve figured out there’s no redemption. 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.”
Dorsey announced in February that Block was laying off over 4,000 workers, nearly half of the company. The former Twitter CEO said the company was doing well but needed to be “honest” about how AI, what he called “intelligence tools” was changing the status quo.
In May, Coinbase announced it was laying off 14% of its workforce, affecting about 700 roles. Armstrong wrote in an email to employees, which he posted on X, that cuts were designed to make the crypto company “leaner, faster, and more efficient for our next phase of growth.”
Arora said Palo Alto Networks has a different approach. Instead of large-scale layoffs, the cybersecurity firm is using natural attrition to gradually replace workers. He said the company also knows exactly where to find future technical workers.
“We’ve been hiring people only through hackathons,” he said, referencing technical roles. “Give me 12 months, I’ll have sort of transformed 20, 25% of my team,” he added. “Give me three years, I’ll have hopefully enough AI savvy people working at Palo Alto.”
The company is continuing to grow. Palo Alto Networks has added 5,423 total employees to its headcount from the end of fiscal 2025 to the third quarter of 2026, according to its most recent 10-Q filing.
How Palo Alto Networks will change
That doesn’t mean every role at the company will grow in the same way.
Arora questioned why he needs “400, 600 people in marketing” when frontier models can already be trained on marketing strategies and a company’s specific voice.
“My biggest problem in marketing is I have 600 people, but I’m not sure they all fully understand how to consistently deliver my tone of voice, my value proposition, and how not to break my brand by having different collaterals in public domain,” he said.
Arora said his “rule of thumb” is that in the next three years companies will “probably have half of the people” in general and administrative roles like marketing, HR, and finance. In that time, Arora said AI applications will advance to the point of being able to replace a lot of the work those employees do.
One of those advancements will be when AI models/tools more freely express their opinions by providing feedback to human users.
“Your scholar, whether you want to call it an AI assistant, AI marketing assistant, AI HR assistant, is going to say, ‘I looked at your copy, it sucks. It’s not good enough It’s not consistent with a tone of voice. Here’s what I would recommend,'” he said. “This has an opinion. That will make my average employee much smarter than they were today. Then I don’t need so many of them because they’re doing most of the work for you.”
At the same time, Arora said he wants many more technical and sales resources. Arora previously said he wants more cybersecurity engineers and researchers in the future. During the 20VC interview, he said he has employees who want AI resources to help implement plans to transform marketing and HR.
“I think there’s this fallacy people believe we’re going to have less people working because AI is going to take over our jobs,” he said. “I don’t believe that. I think what’s going to happen is you can’t imagine the number of people on my team who want more technical resources, more AI savvy resources because they want to do exactly these things.”
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