Why AI-Driven Layoffs Could Backfire as Companies Race to Rehire Talent

Dewain Robinson (0:00)

Hello, welcome to the Cloud Wars AI Minute. I'm your host, Dwayne Robinson, and we go over the things here that your boss expects you to know about what's happening in the AI industry. And today, the topic is going to be this new move that we're starting to see across the board, that there's starting to be a better understanding that there's not a lot of value necessarily in just using AI to be able to do automation.

What we're seeing is it does do a great job at this, and it frees up your resources to be able to go do other things. What we're starting to see, though, is starting to see some analysis coming back that is allowing us to be able to understand what we actually think is a wise strategy for those resources that are being freed up versus bad strategies and organizations that may be looking at doing layoffs of certain resources and things. And so what we're starting to see is that about 75% of this cost savings that we're seeing, a lot of people are starting to think, oh, well, if it frees up a good bit of time for my employees, then what I can do is I can just reduce my workforce. Now what we're really starting to see is that there is an anticipation where even Gartner is now saying that by 2029, they're expecting 30% of all AI driven layoffs to be rehired. And not only rehired, rehired at higher cost than they were before.

And that's due to the fact that there's going to be this sort of renaissance that we expect to happen, which is where companies that believe that they were going to get a ton of value out of AI, which they are, and they're getting freed up to be able to free up resources, those that choose to re-invest seem to be the ones that are going to get the biggest return off of AI. Whereas organizations that choose to lay off end up in a situation where those resources become extremely expensive that they need to get back, and unfortunately they need to re-invest those resources in order to be able to keep up with the momentum of the competitors that choose to re-invest. This will become a very interesting scenario in the world as we continue to move forward, and I think what you're going to see is a real big shift on saying, how does AI really help amplify our employees that we have within our organizations, versus making them become irrelevant? And it's really a good trend that we're starting to see that this is coming to a fruition, that companies are getting rewarded for reinvesting their people, versus thinking, oh, we can just continue at the current burn rate, and you know, what our productivity level is right now is sufficient, when the reality is AI and AI partnership with humans is actually resulting in being able to make a lot more value in a shorter period of time. And that makes it easier for your competition to be able to be even more competitive, if they simply reinvest those resources, versus just letting them go and taking a short-term bump on their revenue.