Yes, I watched it. I'm not saying he got rid of engineers so much as just not hiring new ones.
If he's hiring new people they won't be engineers or the people that used to do engineering.
They'll be people that are better suited to writing English than code.
37signals typically doesn't do hire a lot of software engineers but just last week they hired Rob Zolkos who is very clearly a software engineer.
I don't think that hiring the engineers was ever an option. He said that he couldnt maintain six native apps before agentic coding. The business never even considered expanding headcount by 6X to do it, it was a complete nonstarter.
There is no fixed pie of work that AI is taking from us. In this circumstance, increased productivity caused the company to just make more stuff, not lay off people (or avoid planned hires).
It is a real world example of https://en.wikipedia.org/wiki/Jevons_paradox