The debate about SaaS decline has been framed almost entirely as a business model problem. Multiples compressing, seat-based pricing breaking, AI agents eating workflows. That analysis is correct but incomplete. The first-order effect is financial. The second-order effect is human, and it will come at us faster than the revenue does.
Every declining paradigm strands its best people on the wrong side of history. Inside a legacy SaaS company today, someone is holding the core product together, the one that generates the actual revenue, while the market, the board, and often their own executive team fixate on the AI initiative next door. If that person is smart and perceptive, and the people holding cores together usually are, they can see exactly where they sit: maintaining the last paradigm shift instead of building the new one. Your smartest people will not stay in that seat.
We’ve watched this movie from the inside more than once. At Twitter, where Oji could anticipate what was upstream of him when Elon Musk indicated acquisition interest in the company: an acquisition, a purge, a re-strategizing; and concluded correctly that waiting to see what happened would be a waste of time for almost any Twitter employee pre-Elon. The people you most need to keep are precisely the ones who run this calculation earliest and leave.
SaaS-era companies are not dead - their value delivery, distribution, trust, and ongoing adaptation to the market realities will mean that their decline will not be as fast as the AI zeitgeist suggests. But they do face a fork, and both paths are big HR problems dressed up in strategy costumes:
Change slowly and stay traditional, and you bleed your best people to the new guard companies, quietly at first and then in clusters, because departures are contagious. That senior person who leaves is going to call three colleagues on the way out.
Or attempt faster transformation, and you face a harder question: how do you organize it? Involve everyone, and you move more
slowlybut keep the orgmotivated. Or send an elite tiger team to attack new opportunities and markets, and now the people left running the old revenue engine know exactly what the company thinks of them. The elite group is having fun. Everyone else is possibly unhappy, possibly working dog hours and starting their job hunting.
This problem is uniquely brutal in software because of how our industry creates value. In tech organizations, every brain matters. Value creation is distributed across almost every department, especially the whole engineering and product org, which means motivation has to be widely distributed too. In contrast, in finance, a small number of people generate most of the value, and everyone else supports them. They also get the outsized rewards, but the culture is built for it, and nobody is surprised. You cannot run a rainmakers-and-support-staff model in an organization that was built, hired, and cultured on the premise that everyone contributes (and asymmetric compensation is not normal) or value delivery does not work. When you try, the resentment and productivity losses are structural.
The talent decay curve is the concept we would ask every SaaS CEO to think about: In the worst case, your talent quality starts declining before your revenue does, and it declines fastest at the top of the personnel capability distribution.
As we mentioned, trust and distribution are real moats; the money will keep coming for years, even if the valuations do not hold up. But you will be earning it with a progressively weaker team, because the people capable of building the next thing leave to go build it somewhere else. Revenue is a lagging indicator. Talent is the leading one.
What do you do about it? Remember your best people are the ones who will be hard to replace with agents; and are the succession story of the company. If you run a legacy SaaS company, treat transformation as an organizational design problem even before a technology one. Decide deliberately whether everyone transforms or an elite group does, and if you choose the elite group option, you may need to pay the motivational bill for the people keeping the lights on; in status, in economics, and in a real path into the new work. Watch the resignation letters, not just the renewal rates. They arrive first.
And finally, if you are the talented operator holding the core together, be honest about what is upstream of you. Often, the forces at work are bigger than your company and much bigger than you. No attitude adjustment on your part truly fixes the big forces in a paradigm shift. You just have to think about your options and what’s right for you.
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Sources: Forbes SaaSpocalypse, Long Angle Q1 2026, Chargebee, Lucidchart tiger teams, Emerge on tiger teams, TroopHR, SHRM —
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