GoKawiilBill McDermott, CEO of ServiceNow, speaking on CNBC's Squawk On The Street outside the World Economic Forum in Davos, Switzerland on Jan. 21st, 2025.
ServiceNow CEO Bill McDermott told CNBC on Wednesday that he expects the company to have the same headcount to begin 2027 as it did to start 2026, even as it integrates acquisitions.
McDermott said using artificial intelligence to boost worker productivity is key to cost discipline.
"As you have attrition in the company, you don't have to backfill it," McDermott said. "So we can still have a great culture. We can still have enormous, enormous, high-performance standards, and at the same time, we can capture massive efficiencies to expand the free cash flow margin of the corporation."
AI has been cited in recent layoff announcements from Block and Atlassian as companies have looked for cost savings provided by the technology.
McDermott made headlines in March during an appearance on CNBC during which he said that unemployment for new college graduates "could easily go into the mid-30s in the next couple of years."
The enterprise software maker posted first-quarter 2026 earnings on Wednesday after the bell, beating consensus expectations on the top and bottom lines and raising guidance.
The stock sank 12% despite the beat.