Half of Staff Quietly Rehired with Reduced Salaries
Recent trends indicate that many companies, after initially reducing their workforce in the name of AI efficiency, may reconsider and quietly rehired those employees. This rehiring often occurs at lower salary rates or involves offshore positions. According to Forrester’s “Predictions 2026: The Future Of Work,” half of the layoffs attributed to AI are expected to be reversed.
The Shift in Workforce Dynamics
As organizations embrace artificial intelligence, the tech sector has seen a significant reduction in grad hiring, plummeting by 46%. Many companies assert these layoffs are necessary to accommodate emerging AI technologies. However, experts warn that such decisions can have unintended consequences.
- 55% of employers express regret over layoffs associated with AI.
- A majority (57%) of leaders investing in AI anticipate an increase in workforce, not a decrease.
AI’s Influence on HR Staffing
The impact of AI in the human resources sector is particularly noteworthy. Reports suggest that staffing in HR could be cut by 50%, despite the expectation that AI tools will maintain service levels.
Many organizations are turning to various AI vendors, aiming to present a façade of being AI-ready, yet lacking the capability to distinguish between legitimate technology and ineffective solutions.
Concerns Over AI Initiatives
In parallel, research firm Gartner forecasts that more than 40% of agentic AI projects may face cancellation by the end of 2027. Factors contributing to these cancellations include rising costs and unclear business value.
Performance Challenges in AI
Research in customer relationship management (CRM) reveals challenges with large language model (LLM) based AI agents. A team led by Salesforce researcher Kung-Hsiang Huang found that these AI agents achieve only a 58% success rate in completing single-step tasks.
Company Reactions and Future Outlook
Organizations such as Klarna and Duolingo have reevaluated their AI strategies in light of current challenges. Despite this, the tech industry continues to experience job losses, as leaders promote the use of AI products.
In September, Salesforce CEO Marc Benioff announced the elimination of 4,000 customer support positions due to AI implementation. The company stated that it would no longer fill certain support engineer roles and was reallocating staff within the organization.
Similarly, Amazon recently declared plans to cut 14,000 corporate jobs, citing the accelerating impact of AI on operational changes.
