Coimbatore city is a growing hub for innovation in start-up industries like automobile, IT, pump sector and health care. Start-up companies are the main backbone for economic growth, innovation and employment opportunities and the start-up ecosystem is supported by government incubation cells. In the AI Era, organizations want to improve performance, automate all manual tasks and reduce cognitive workload. It may improve productivity and efficiency so that AI will impact job losses. Adapting this transformation in start-up companies, new working models need to implement strategies to up skill and reskill workers. To achieve better organisational performance, employees need to update their upskilling and reskilling through an adaptable workplace in the age of AI. The data were collected from 251 respondents from start-up companies in Coimbatore using SPSS 28 and AMOS. The study found a full mediation effect of Employee adaptability between upskilling and reskilling on organizational performance. This study provided the model for how AI Impacts organizational performance updates employee up skilling and reskilling and enhances employee adaptability. This study developed the major role of employee adaptability as a mediator in improving the upskilling and reskilling of workers to achieve organizational performance in the AI era.