The CEO of a Manchester-based LinkedIn technology firm says his company is now valued at £5m after replacing more than 64% of his workforce with artificial intelligence, arguing the technology can do "a better job."
Rob Illidge, 40, launched Vulse, an employee advocacy software platform for LinkedIn, in 2019, before the explosion in AI technology. As the technology developed over the following years, he saw an opportunity to cut costs by substituting his workforce with AI.
Over a three-year period beginning in 2023, he reduced his headcount by more than half, making his marketing, sales and development teams redundant. "AI could do a better job," he said.
Streamlined team and annual savings
Rob now runs a streamlined team of just five people while saving in excess of £100,000 annually. He maintains it is the best decision he has ever made for his company.
Rob, originally from Manchester, said: "The business wouldn't be where it is today without AI. It's allowed us to multiply each person in the business. It does around two to three times the amount of work an employee does, and it carries on working overnight while we sleep."
"There's a lot of pressure on businesses. And staff costs are one of them. The money was better spent elsewhere. AI could do a better job. My business is my baby. No one else in the company is as passionate about it as I am, but AI can be."
From side project to AI-driven growth
Rob originally established the venture in 2019 as a side project, with its primary focus being to promote and encourage LinkedIn posting for businesses through employee advocacy.
Rob said: "We were even looking at building our own AI model before ChatGPT and Claude had come out. But we continued to build it. We believed in it and it started to take off."
Following a year of development, Rob obtained funding to launch the business properly. "We got excited and used the money to hire a lot of employees. We started at five but grew quickly. After a couple of years, we had 14 employees. They all came from different levels of experience. Some were graduates and it was their first job, others were more senior."
As the AI revolution gathered pace, Rob recognised the technology could outperform many of his workforce. In 2023, he chose to run his business with a minimal team, depending substantially on AI, which resulted in making over 64% of his staff redundant across the following three years. Altogether, Rob substituted nine employees with artificial intelligence, with graduates facing the greatest risk.
Costs and valuation
Rob said: "We managed to get VC [venture capital] funding and got excited. We used the money to hire lots of employees. But we had to be strategic. There's a lot of pressure on businesses. And staff costs are one of them. The money was better spent elsewhere. We were looking at repetitive tasks, so graduate jobs were more likely to go. AI could do a better job."
"As a founder, you're responsible for livelihoods, but there's a conflict of interest - you have a business to develop at the same time. It's a balancing act. But it's something I'm becoming more comfortable with."
Rob describes it as the finest choice he ever made for the firm, as it has resulted in substantial cost savings. He said: "The business wouldn't be where it is today without AI. Our AI tools cost £140 a month. Employing one person on an average salary costs more than £500 a month in National Insurance and pension alone, before you've paid them a penny."
"Staffing every role we've replaced with AI would cost around £250,000 a year at former staff's pay. Revenue per employee is up 25x in two years, from around £1,500 to over £38,000."
In total, Rob estimates his annual savings in staffing costs now stand at around £100,000. He maintains the business is performing better than at any point in its history. In 2023, Vulse was valued at £750,000. Now, its recent valuation estimates it to be worth £5m. His monthly recurring revenue has also risen by 76% year-on-year.
Future growth with AI
He said: "It's like David and Goliath. We're a small business fighting against giant enterprises, but we're winning because of AI. We win against traditional businesses with lots of employees because we don't have the overheads. It's a blessing in disguise for everyone. Those employees we let go will go on to find a better job for them."
Rob is keen to expand his business further by harnessing the power of AI. He said: "Most businesses should take advantage of AI. We're looking to grow. AI has massively levelled the playing field, and it means that enquiries come from all over the world, not just UK, for our small business."
"I agree that AI development should slow down. But at the same time, it's helping UK business like mine. And when I go to universities to do talks, lots of students are studying AI topics. It's great to see. New roles are being created as a result of AI, so it's definitely a positive that they're taking it on board and being proactive because those are the jobs that are going to be available."
