Artificial intelligence failed: businesses have started rehiring laid-off workers

Companies were cutting staff, assuming that artificial intelligence would take on some of the work and help reduce costs. But after implementing the new technologies, some employers faced an unexpected problem: without human experience and oversight, automation does not deliver the expected results.

Why are companies re-hiring laid-off workers

Microsoft, Barclays Bank, and the Kroger supermarket chain are among the companies that announced layoffs this year in the wake of implementing artificial intelligence. In some cases, employers eliminated positions they deemed redundant, in others they reduced headcount to direct the saved funds toward technology development, writes Associated Press.

However, after launching AI models, applications, and agents, some companies found that the technologies do not cope with tasks as expected. Moreover, automated systems require more human oversight.

Two years ago we asked: "Could this happen?", and now we say: "Yes, it is happening right now"

— says Lucy Beaumont, Senior Vice President of the British technology company SHL.

Evidence of re-hiring previously eliminated positions is also reflected in data from recruitment firm Robert Half. At the beginning of the year, hiring managers in finance, marketing, law, and healthcare said their companies were reopening vacancies that had mostly been closed due to AI implementation or automation.

Among the reasons for such a decision, employers cited:

the need for greater human oversight than initially anticipated;

the inability of the technologies to reproduce the knowledge and experience accumulated by the company;

limited capabilities of artificial intelligence in performing tasks that require professional judgment.

Robert Half Senior Regional President Bill Driscoll explained that AI is not yet capable of fully replacing critical thinking, collaboration, creativity, and professional know-how of employees.

Who in the corporations has already acknowledged a miscalculation in staffing

A telling example was the Swedish financial company Klarna, which is developing zero-interest installment services. The service massively laid off customer-support staff, relying on chatbots, but later had to urgently rehire specialists. Klarna's CEO Sebastian Semiatkowski candidly told Bloomberg News that the company went too far in trying to cut operating costs with algorithms.

In June, Ford also announced a review of its staffing decisions. The company hired or promoted experienced engineers to 350 positions after the AI tools introduced for quality control did not show the expected effectiveness.

At the same time, Ford stressed that it is not abandoning AI. The company continues to use technology to improve product quality, but combines it with employees' technical expertise.

Why AI cannot fully replace humans

Senior analyst Betsy Summers of research agency Forrester emphasizes that in optimizing a company, informal employee duties are rarely taken into account. This includes internal team support, rapid crisis resolution, and emotional understanding of a situation that keeps work processes cohesive. Moreover, most daily operations in accounting or data work are not adequately documented, causing machines to make systematic errors during processing.

Brooks Holtom, management professor at McDonough School of Business, Georgetown University, noted that companies do not always analyze at which stages employees create additional value.

For example, in customer support, chatbots are often forced to route requests and complaints to people. An employee may:

recognize the customer's emotional state;

assess the complexity of the problem;

understand when a standard answer is not sufficient;

find an unconventional solution within the set rules.

These skills help resolve situations that an automated system cannot handle on its own.

How employees should act if they are offered to return

Not all laid-off workers are ready to work again for companies that previously decided to replace them with AI. Lucy Beaumont noted that after being fired, people may lose trust in the employer and feel psychologically unsafe.

Therefore, an invitation to return does not necessarily mean the worker will agree to the former conditions. On the contrary, they may use the situation to renegotiate terms.

In particular, during negotiations it is worth discussing:

higher salary;

how the company plans to use AI going forward;

guarantees regarding future staffing decisions;

additional training and opportunities for career growth.

Holtom also recommends agreeing on an updated job description. It should take into account both the use of technology and the employee's professional experience. Such an approach can form the basis for a move to a higher position and better pay.

By the way, earlier Microsoft founder Bill Gates suggested that with the development of artificial intelligence, the special need for human labor would persist only in a few professional areas. Among them he named programming and code development, biology, energy, and professional sports.

Gates explained that even if computers can perform more and more tasks, people may not necessarily want to hand over all work to them. Answering the question of whether other professions will remain needed, he stated: "In most cases, no — we'll decide that."