The rush to adopt new and innovative technology is an inevitable part of the advancements being made in the modern world, but caution is equally necessary. A new study found that many companies now regret their AI-fueled layoffs. For workers, the regret around AI layoffs was almost instant as their jobs were cut in favor of tech tools that could better promise efficiency, but for business leaders, the impact has been slower to reveal itself.
Impulsive decisions are never welcome in the sphere of business considering how they can often lead to a slew of consequences that become impossible to untangle, and the trend of AI replacing public and private sector jobs brings similar tidings. Leaders regret firing workers for AI primarily because there is little knowledge readily available on how to implement AI, making it hard for the switch to be worthwhile.
This is why employers who haven’t bit the bullet and submitted to the technology should consider planning out their next move very carefully.
Businesses admit to making the wrong decision in making employees redundant by introducing AI at the organization. (Image: Pexels)
55% of Companies Regret AI Layoffs After Cutting Workers in Favor of Tech
A new survey by organizational design and workforce planning platform Orgvue found that 4 in 10 business leaders have laid off employees in order to implement AI, however, 55% of them admit they made the wrong decision to make employees redundant. The respondents have not only allowed their AI ambitions to lead the layoffs, but around 34% admit that employees have also quit as a direct result of AI.
Artificial Intelligence has provided us with some of the most groundbreaking tools in recent years, but their callous adoption has also resulted in consequences that are slowly making themselves known.
There has been an upward trend in AI adoption since 2024, and more recently, companies like Google have committed fully to driving progress on building AI while others like Duolingo have committed to adopting it at all levels of the organization.
Employers Are Worried About Unskilled Employees Using AI
While 55% of businesses regret AI-driven redundancies, there is another side to the concerns as well. The Orgvue report found that 47% of employers are worried about employees using AI without proper controls and this is driving 80% of the leaders to consider reskilling employees to use AI more effectively. The difference in the number of those worried and those taking action is telling and shows us a gap where employers and HR leaders can better take control of establishing AI resources at their organization.
Additionally, 51% of leaders are taking charge by introducing internal policies to educate employees on the use of AI in the workplace while 51% are certain that strategic reskilling is important to prepare the workforce. L&D budgets need to expand to help employees be ready with the necessary training, and 41% have already added money to the funds.
To put matters further into perspective, 25% of employers acknowledge that they are unsure which roles in their organization can benefit most from AI. With that in mind, it’s no surprise that companies regret their AI layoffs considering they committed to the switch without a plan. Approximately 43% of organizations have chosen to work with third-party providers to determine how to ready the workforce for the changes brought about by AI. This appears to be the best solution to avoid making any unintentional mistakes by replacing workers with AI haphazardly.
HR Leaders Need To Drive the Change to Avoid AI Layoffs Regrets
The leaders who regret firing workers for AI are primarily those who have made a switch to AI without planning out the purpose and impact first. The AI-related layoffs and resulting business regrets can come too late to make a difference once extensive investments are made, which is why all considerations need to be made before or alongside the AI-centric changes.
Ignoring AI and its associated tools can be fatal to most organizations in coming years, but rushing adoption without a strategy isn’t recommended either. HR teams need to work in tandem with those in charge of leading the AI efforts to ensure that they don’t join the ranks of companies regretting AI-related layoffs.
How to Avoid Regrets Around Embracing AI at Work
There are a few recommendations we can offer to help avoid AI layoffs and the resulting business regrets.
- Research the AI tools available on the market thoroughly before narrowing down on ones that will be beneficial to the organization
- Dedicate a team of professionals to research the ins and outs of AI tools to understand their use and application
- Involve HR leaders in the exploration of AI so they can consider the impact of the changes on the workforce
- Don’t repeat the mistakes of replacing workers with AI and instead explore how AI can be used alongside employees
- Work with third-party providers who are experienced with tools to understand where it can be incorporated at the organization
- Ask workers where AI tools can be beneficial to them and work with them to investigate potential use cases
- Start small and study the impact of using AI tools before a full-scale switch to such tools
- Oversee the tools and their performance to ensure they don’t make any incorrect decisions or go against the federal and state regulations of AI use
- Reskilling needs to be prioritized to ensure that teams are prepared properly for AI use
- Invest in L&D efforts to slowly bring the entire organization up to speed
- Set clear limits for where AI use is acceptable and create guidelines to ensure it is not misused or handled carelessly
With so many leaders who regret firing workers for AI, it is evident that choosing to go all in on replacing the human workforce with AI and automation is not the best strategy. Technology has not caught up to the point where it can work flawlessly or even consistently without regulation, which is why it is still best to prioritize workers who can learn and adapt to the shifting needs of the organization right now.
Do you have any perspective to offer on why companies regret these AI layoffs? Let us know. Subscribe to The HR Digest for more insights into how the world of employment is evolving right now.