Reinvests in sales and engineering
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ServiceNow has not said which departments will be affected
Automation software giant ServiceNow is on track to save $100 million in staffing costs this year, attributing the windfall to internal AI deployment.
The company made the announcement during its Q2 earnings call, joining a growing list of tech leaders claiming massive savings from artificial intelligence.
Even without the sharp focus on AI-fuelled savings, ServiceNow reported robust second-quarter results. Total revenue soared 22.5% year-over-year to $3.2 billion, while net income jumped 47% to $385 million.
The upbeat forecast, however, wasn’t solely due to customer adoption of ServiceNow’s automation tools.
CFO Gina Mastantuono said internal AI-driven efficiencies were also a factor.
“We talked at Knowledge about [$100 million] in savings in headcount alone in 2025. We’re seeing that come to fruition as planned,” Mastantuono told investors.
She added that productivity gains from AI use are allowing the company to redeploy staff to more complex issues and focus on AI training and upskilling.
The impact has been particularly pronounced in IT and customer support, where the deployment of AI agents has allegedly halved case resolution times.
While ServiceNow’s margins are not expected to rise due to reinvestment, Mastantuono said the company remains committed to “prudent expense management” in anticipation of its planned acquisition of AI startup Moveworks.
Moveworks, which ServiceNow announced as an acquisition target in March, specialises in AI agents that connect enterprise systems. If the deal closes in the second half of the year, ServiceNow expects some near-term effect on its margins.
Still, Mastantuono said the company is reallocating resources rather than scaling back.
“We’re definitely still investing for growth to meet demand for AI transformation. We’re 100% seeing the efficiencies. I’m just reserving the opportunity to lean into investments because the opportunity we’re seeing with AI is so massive.”
As part of that growth strategy, ServiceNow is ramping up hiring in sales and engineering to support enterprise AI adoption.
Mastantuono did not specify which departments would see staff reductions but maintained that the internal savings are being used to fuel innovation and customer engagement.
ServiceNow’s optimism around AI-driven productivity gains comes on the heels of CRM software firm Salesforce’s claim that AI now handles between 30% and 50% of the workload at the company.
In a June interview with Bloomberg, Salesforce CEO Marc Benioff remarked, “All of us have to get our head around this idea that AI can do things that before we were doing, and we can move on to do higher-value work.”