BENGALURU: Companies that cut jobs to replace workers with artificial intelligence (AI) could end up rehiring 30% of those employees by 2029, often at significantly higher costs, Gartner said on Wednesday.
The technology research and advisory firm said workforce cuts could weaken talent pipelines and lead to a loss of institutional knowledge as organisations adopt AI. With labour force growth flat or declining worldwide, competition for skilled workers is expected to increase recruitment, training and onboarding costs.
“When business and IT executives look back on the early AI-era, they will realize their greatest mistake was believing that work automation was the point, when workforce amplification was the opportunity,” said Tori Paulman, vice president analyst at Gartner.
Paulman said companies should use AI to change roles and move workers from less productive work to new opportunities rather than use it mainly to reduce costs.
“Business and IT executives who use AI primarily as a tool for cost cutting risk making reductions that are too deep and too soon, affecting their ability to innovate their business model and compete in new markets as AI continues to mature,” she said.
Gartner identified four shifts that it said will shape how organisations manage work as AI develops.
The first is to expand human capability through the human-AI relationship. Gartner said organisations should use AI to support employees’ judgement, creativity, leadership and decision-making while keeping people accountable.
The second is to build a workforce that can adapt to AI rather than simply adopt it. This includes developing AI literacy, AI-enabled skills management and digital dexterity, while ensuring executives are “AI savvy”.
The third shift is to preserve context, judgement and meaning as AI becomes part of more business processes. Gartner said organisations need systems that maintain human oversight and help employees understand why processes are carried out, rather than only how they work.
The fourth is to build a foundation for long-term value from AI. Gartner predicts that by 2027, 75% of organisations that focus on turning AI productivity gains into cost savings will be overtaken by competitors that reinvest those gains in innovation, modernisation and upskilling.
“The challenge facing CIOs and business executives is no longer technological; it is using AI to amplify human intelligence, expertise and creativity,” Paulman said.
