In the AI era, what is the most direct way for companies to reduce costs and increase efficiency? Many companies' answer is: layoffs. When business is sluggish, lay off a batch; when profits fall short, lay off another batch; now that AI can do the work, it seems there is one more reason to lay off employees.
But recently, a 101-year-old American company has publicly taken the opposite stance: we also use AI and automation, but we never lay off employees.
What is even more surprising is that this company has not been without business crises. During the pandemic in recent years, while carrying huge debt from the construction of a new factory and suffering a 20% plunge in revenue, it still did not lay off a single person. By the end of the year, revenue had instead grown by 15%—this company is the American syrup manufacturer Torani.
Recently, Torani CEO Melanie Dulbecco, in an interview with Business Insider, talked about her views on corporate layoffs: “I think layoffs are a choice.” She also revealed that in its 101 years of existence, Torani has never conducted layoffs.
And now, this company that insists on not laying off employees is expected to exceed $800 million in revenue by 2026.
“Layoffs are just a financial calculation, but no one thinks about what to do after the layoffs”
Placing Torani's business philosophy in today's tech industry makes it seem somewhat unconventional.
In recent years, from internet giants to AI startups, layoffs have become an almost routine move for companies adjusting their business strategies. Some companies, even while still profitable, will reduce their workforce to improve profit margins and optimize organizational structure.
But Dulbecco does not agree with this approach. Of course, she is not saying that companies should never lay off employees under any circumstances: if a company is on the brink of bankruptcy, there may indeed be no other way. But in her view, many companies have not actually reached that point, yet still treat layoffs as the first choice for solving financial problems.
The reason is not hard to understand: wages are a real cost, and after laying off a batch of employees, expenses on the financial statements can quickly come down—but the question is, if people are laid off, will the business necessarily improve?
Dulbecco believes that many companies only calculate how much money can be saved in the short term, while ignoring how to restore growth after layoffs:
“I think this is just a financial calculation, without considering how a company can remain resilient and how to regain growth momentum. Because to do that, you still need a team.”
In other words, in her eyes, employees are not only a cost, but also a force the company can rely on when it encounters difficulties. This may sound somewhat idealistic, but Torani has actually gone through a crisis sufficient to test this philosophy.
Revenue plunged 20% during the pandemic, yet no layoffs despite factory construction debt
Back in 2020. At that time, Torani was advancing a major plan: relocating its business to San Leandro, California, and investing in the construction of a new production factory. Interestingly, when choosing the location of the new factory, Torani's first consideration was not how to minimize rent, but how to keep as many employees as possible.
According to Dulbecco in a previous interview with Fortune, the company specifically collected employees' residential zip codes and marked them on a map to find a commuting location acceptable to everyone. The company's goal was: the factory can move, but it hopes not a single employee will leave because of it.
However, no one expected that during the construction of the new factory, the pandemic suddenly broke out. Because of the huge upfront investment, Torani had already borrowed a large amount of money, and at precisely this time, the pandemic caused many cafes and beverage shops to close, severely hitting the company's main sales channels.
In April 2020, Torani's revenue once fell by 20%; the new factory was still burning money, while sales revenue suddenly shrank. If it were another company, announcing layoffs at this time would have been understandable—but Torani's management made a different decision.
Dulbecco recalled that at the time there was an internal discussion about a question: “When the crisis is over and we look back at today's decision, what kind of choice would make us proud?” In the end, everyone decided to get through it together, without layoffs and without putting employees on unpaid leave.
However, not laying off employees did not mean doing nothing. To ease financial pressure, Torani began to comprehensively cut other expenses: reducing marketing and advertising budgets, suspending business travel, and requiring each department to re-examine its budget and cancel unnecessary spending.
At the same time, the company also worked hard to find new sources of revenue: since cafes and beverage shops could not open temporarily, then sell products to ordinary consumers. So Torani increased investment in online retail and grocery retail channels to make up for the loss in traditional business as much as possible.
As a result, this approach really worked. According to Dulbecco, after Torani's revenue fell 20% in April 2020, it began to recover in May. In the end, the company's full-year revenue in 2020 not only did not decline, but instead increased by 15% year over year.
In her view, if a batch of employees had been laid off at that time to save costs, it would have been difficult for the company to achieve such a rebound: after all, once the market recovered, the company would still need people familiar with the business to produce products, manage the supply chain, and serve customers; retaining the original team also saved the trouble of rehiring and training employees.
AI has indeed reduced the company's hiring, but existing employees do not need to worry about “losing their jobs”
One point must be made clear: Torani's insistence on not laying off employees does not mean it is a traditional company that rejects new technology.
In fact, this century-old syrup factory is also actively embracing AI and automation. It is understood that Torani currently uses AI in market research, sales forecasting, demand planning, and other operations, hoping to use technology to improve operational efficiency.
Dulbecco also frankly admitted: AI has indeed reduced the company's hiring needs. Without these technologies, Torani would originally have needed to hire more employees to complete the same work. Now that some tasks are handled by automated systems, the company no longer needs to add so many positions.
But there is an important distinction here: hiring fewer new people does not equal laying off existing employees.
Torani's approach is to let automation take on some repetitive work while providing employees with opportunities for job transfers and career development. Therefore, Dulbecco said that the company's employees do not feel panic because of the introduction of AI:
“Our employees will not worry because of technologies like AI, because they believe that while advancing automation, we will enhance the value of work and will never do anything that stifles employees' development opportunities.”
Torani dares to do this because it has an internal employee development mechanism called “Career Mixology”: encouraging employees to try different positions rather than doing the same thing for a lifetime. For example, an employee may start in inventory management, then move to procurement, supply chain, or even other business departments. In other words, even if one of an employee's tasks is replaced by AI, they do not necessarily have to leave the company, but have the opportunity to learn new skills and move to other positions.
So, at least judging from Dulbecco's statement, AI has already affected the company's scale of new hiring. It is just that Torani chooses to reflect the changes in personnel demand brought about by technological progress mainly in future hiring, rather than by cutting existing employees.
Average annual revenue growth of about 20% over 35 years—does not laying off employees really not affect making money?
At this point, some may ask: insisting on not laying off employees sounds good, but can the company really keep making money?
Judging from the operating data Torani has published, at least so far, this model has not prevented it from expanding its business.Torani was founded in 1925, starting out as a producer of flavored syrups for beverages. After a century of development, its products have expanded from just a few initial syrups to more than 150 today.
According to reports, when Dulbecco joined Torani in 1991, the company had only 9 employees and annual revenue of about $700,000. Today, Torani has more than 500 employees. Dulbecco revealed that over the past 35 years, the company's annual revenue growth rate has averaged about 20%, and revenue is expected to exceed $800 million in 2026.
Of course, Torani's model is not something every company can copy, after all, the food and beverage manufacturing industry differs markedly from industries such as the internet and software development in terms of business models, cost structures, and staffing needs. Still, amid the current wave of layoffs at American companies, this company's experience is indeed worth paying attention to:
According to statistics from the employment consulting firm Challenger, Gray & Christmas, in the first nine months of 2026, American companies announced a cumulative total of 573,195 job cuts; although this was down 39% from the same period last year, a large number of employees still face the risk of unemployment.
When AI can do more work, do companies still need that many people?
In fact, Torani's approach also leaves a very realistic question.
Today, AI can already write code, analyze data, generate reports, and even independently complete some tasks that originally required collaboration among multiple people. For companies, if work that originally required 10 people can now be done by only 5, then what should be done with the remaining 5?
Torani's answer is to let them shift to other positions and take on more valuable work as much as possible, rather than simply laying them off. But whether this approach can be sustained over the long term obviously also depends on whether the company still has enough new business, new positions, and room for growth.
In addition, when a company introduces AI, significantly improves production efficiency, and continues to grow profits, yet still decides to lay off a group of employees, is this a necessary business choice, or a cost-reduction method that management is more willing to adopt?—What do you think about this question?
This article is from the WeChat public account "CSDN", compiled by: Zheng Liyuan
