Many companies regret laying off employees because of AI

Last week, Bloomberg reported that over the past 3 years, Ford has re-recruited hundreds of veteran engineers to handle quality problems that automation systems cannot do. “Artificial intelligence is a great tool, but it’s only as good as the information you use to train it,” said Charles Poon, Ford’s vice president of hardware engineering.

Many other businesses have also adjusted their recruitment plans to focus more on human resources, such as Commonwealth Bank of Australia (CBA) and software giant IBM.

Last year, CBA cut more than 40 customer service staff to replace them with AI voice bots. However, this system could not cope with the workload, causing the number of calls to even increase, forcing the bank to reverse staff cuts. “This is a huge victory,” said Australia’s financial industry union.

In August 2025, CBA admitted on the sheet ABC that it “did not fully consider all relevant business factors” when announcing its redundancy plans. “We should have evaluated the positions needed more carefully,” they said.

Similarly, IBM uses an AI system for its human resources department, which can handle about 94% of common requests. However, this system cannot handle the remaining 6%, which includes ethical situations.

This year IBM also plans to triple its recruitment of entry-level workers in the US. “If we don’t continue to recruit new people, what will happen in the next 3-5 years? There will be no more next-door human resources,” IBM Human Resources Director Nickle LaMoreaux said at the Charter AI Summit in New York in February.

These examples reflect the view of many analysts that cutting staff to increase AI use is not necessarily the best way to grow. “Allocating budgets in the direction of ‘using technology to replace people’, but not training or upgrading skills, will leave employees unprepared to take advantage of AI. Many businesses that push automation later regret the layoffs, due to cutting the very personnel needed to oversee AI,” said the Intuition Labs report.

According to a report by analytics software firm Orgvue, 39% of business leaders surveyed have cut staff to apply AI. However, of these, 55% admitted that the decision was wrong.

“When AI outputs are inconsistent, inaccurate, or difficult to apply in practice, businesses often have to bring humans back to supervise. This can lead to duplicate work, slower decision-making processes, and drag down the productivity benefits that AI brings,” said Jessica Zhang, Senior Vice President in charge of Asia-Pacific at human resources solutions company ADP.

Recruiting platform Robert Half said 32% of hiring managers in the US revealed they had eliminated a job because of AI, but then rehired for the same or similar position.

“AI is changing the work environment. But businesses are also increasingly realizing that building a collaborative model between humans and AI will bring more value than complete replacement,” Capitol University of Technology concluded.