PagerDuty just cut 15% of its workforce. AI is already doing their jobs.

PagerDuty crossed $500 million in ARR last quarter.

Revenue grew 0.8%.

So they cut 15% of the company.

Not because they're struggling. Because AI automation already replaced the work.

The new CEO John DiLullo took over in May. Three months later: 173 jobs gone. Support functions gutted. Sales and product teams untouched.

His explanation was brutally specific: AI increased internal capacity in support workflows. Fewer humans needed. Savings redirected to sales and AI product development.

This is the playbook in action. Not theoretical. Not "AI might replace jobs someday." Already happening. At a company that sells AI operations tools to two-thirds of the Fortune 100.

Here's what makes this different from every other 2026 layoff: PagerDuty didn't cite restructuring. Didn't cite market conditions. Cited AI automation as the direct mechanism for workforce reduction.

Non-GAAP operating margin hit 23.7%. They're targeting 30%. The math is simple: fewer support humans, same revenue, higher margins.

If your support team handles repetitive workflows, audit them today. PagerDuty just proved the model: automate internal operations, cut headcount, reinvest in revenue-generating roles. Every enterprise CFO is watching this quarter's earnings calls for confirmation.

Your support function is next.