Palo Alto Networks CEO Nikesh Arora to companies laying off thousands of employees: ‘Mass job cuts is not the solution because…’
At a time when tech giants like Amazon, Oracle, Microsoft, Meta and Google, among others are turning to mass layoffs in a race to lead the artificial intelligence (AI) revolution, Palo Alto Networks CEO Nikesh Arora is pushing back. Arora argues that massive job cuts are not the solution to the industry’s current talent shortage, and has advised opting for a gradual, specialised hiring strategy to build a future-proof workforce.During a recent appearance on the 20VC podcast (via Business Insider), the head of the $235 billion cybersecurity company explained that the corporate world is facing a harsh reality: companies simply do not have the right workers for the AI era.“The challenge right now is 90% of the enterprise employees are not AI savvy,” Arora said, pointing out that this is among the biggest challenge in the industry.
Burden on tech workers
According to Arora, the transition to AI is unique because traditional corporate training structures cannot keep pace with the technology. He said that there is no official course he can send his 21,000 employees to attend; instead, the burden is on individual workers to adapt.“They have to be able to learn on their own. I think we’re back to a Darwinian moment where everybody has to figure out who’s really good,” Arora said. The former top executive at Google and SoftBank noted that other tech leaders have looked at this skill gap and decided it is easier to fire workers than to retrain them. He specifically pointed to Coinbase CEO Brian Armstrong and Block CEO Jack Dorsey as examples of executives who chose to shrink their organizations from scratch.“They’ve gone to some version of 30 to 40% less people 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’,” Arora said.
The Palo Alto way: Hackathons
Arora revealed that Palo Alto Networks is moving on a completely different path when it comes to layoffs. Rather than initiating sudden, morale-crushing layoffs, the cybersecurity giant is using natural attrition – the normal rate at which employees leave a company over time – to slowly and strategically replace workers.Furthermore, the company has completely reinvented how it sources fresh tech talent.“We’ve been hiring people only through hackathons. Give me 12 months, I’ll have sort of transformed 20, 25% of my team. Give me three years, I’ll have hopefully enough AI savvy people working at Palo Alto,” Arora revealed.The strategy appears to be working alongside steady corporate expansion. According to Palo Alto Networks’ most recent financial filings, the company has successfully added 5,423 employees to its overall headcount between the end of fiscal 2025 and the third quarter of 2026.
