The AI Layoff Myth

Good Morning Reader it's Maria,

I've been watching this play out for years: A company hits a rough patch, or just wants to look lean for the shareholders. They announce a sweeping new strategy, headlines follow, share prices go up, and then, people start losing their jobs.

The official reason changes depending on the decade: market conditions, offshoring, automation...today, the reason is AI.

But here's what the data is finally telling us: it isn't working.

If podcasts are more your speed, I've got you covered; there's a discussion about this topic available now here.

THE BIG IDEA

This is not a new story. It's an old one with a new villain.

For decades, mass layoffs have been a tool executives reach for when they need to hit a number. AI is simply the latest excuse they use.

Gartner just published research that should be all over the news. They surveyed 350 global executives from large companies, all of them already deploying AI agents and automation tools. And 80% of those companies had cut jobs as part of their AI rollout.

The result? No improvement in returns at all. ZERO!

The companies that cut the most performed almost identically to the ones that cut the least. In some cases, the ones who held onto their people actually came out ahead.

So what's really going on here?

The Gartner analyst said it plainly: Layoffs may free up budget, but they do not create return, and that is a very important distinction.

Cutting people saves money on paper.

It does not build anything.
It does not grow anything.
It does not make your company better at what it does.

So why does this matter to you Reader?

If you work in a large organisation, this is the environment you are operating in right now. Leaders under pressure to show AI returns are making workforce decisions based on what fits the narrative, not on what works.

That means your job security may have less to do with your performance or your value, and more to do with whether your role appears automatable on a spreadsheet.

And if you run your own business or lead a team, this research is a roadmap for what not to do. The temptation to cut costs and point to AI as the reason is real but the data says it will not get you where you want to go.

Either way, this is the context in which you are making decisions about your career, your team, and your future right now.

I have seen this pattern my entire career, in corporate environments long before anyone was talking about AI.

When executives are working towards short-term bonus plans and quarterly targets, the incentive is to show results fast. Cutting headcount does that; it looks clean in a presentation, the share price twitches upward, and (what most executives care about) the bonus gets paid.

The crazy thing is that Gartner predicts that half of the companies that cut customer-facing roles due to AI will be rehiring for them by 2027. Under different job titles, at higher salaries, competing for talent in a tighter market. The knowledge that walked out the door does not come back cheaply.

This is a leadership failure, and AI is just the latest thing being used to justify it.

The companies that are seeing returns from AI are doing something different. They are upskilling their people, redesigning roles around what humans do best and what AI does best, building organisations where people guide and govern the technology, rather than get replaced by it. Gartner predicts that by 2028 to 2029, AI will create more jobs than it eliminates, as new roles will emerge that only humans can do

The Gallup State of the Global Workplace 2026 report adds something important to this picture. Global employee engagement has dropped to 20%, the lowest since 2020 (and then there was a pandemic). In the US, nearly one in four employees in AI-implementing organisations believe their job will be gone within five years. In finance, insurance, and tech, it climbs to nearly one in three.

People are scared! Understandably so.

But here's what I believe: AI is not the enemy. The short-termism at the top of some organisations is.

There is a very real difference between a leader who looks at AI and asks, "How do we use this to grow and to free our team up for the work that matters?" and one who looks at it and asks, "How quickly can I cut headcount to increase the bottom line?"

The first kind of leader builds something that will last. The second kind hits a quarterly number to make sure they get their bonus, no matter the cost to the company and its people.

And if you are one of the people who has been, or is worried about being, caught in one of these rounds: your next move is not to wait. It is to get ahead.

AI literacy is one of the most valuable skills you can build right now. Because understanding how to work with these tools, what they are good for, and (more importantly) what they are bad at, is what will make you indispensable. Whatever happens around you.

Don't know where to start?

Book a free consultation and let's chat!

THE ACTION STEP

Audit how your company is using AI. Not just what's written on paper, but what each employee is using it for

Most organisations have a position on AI. Far fewer have an honest answer to whether it is actually solving the right problems. Take 20 minutes this week and work through these questions:

What are the real bottlenecks in how your team works?

The actual day-to-day friction. Where does work slow down, get stuck, or fall through the cracks?

For each bottleneck: is this something AI can fix?

This is the question most companies don't ask, and it is why so many end up rehiring people they just let go. AI is genuinely brilliant at some things and utterly useless at others. Before assuming it is the solution, check whether it is the right solution for that specific problem.

Where is there a performance gap that AI could realistically close?

Think about quality, speed, and consistency. Where is your team stretched thin doing work that does not need a human to do it? (but always with human oversight).

What could AI take off the team's plate so they can focus on the work only they can do?

This is the question worth spending the most time on. The goal should not be to reduce your team; it should be to make better use of the people you have.

Are your people being trained to work with AI, or just told to use it?

There is a difference. And if you are in the EU, AI literacy training for employees is a legal requirement under the EU AI Act from the 2nd of August. If that is not happening yet, this is your nudge.

Find out more about the EU AI ACT here.

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AI MADE SIMPLE

Use AI to map the work that only you can do.

This is a genuinely useful exercise, especially if you are mid-implementation or feeling uncertain about where AI fits in your work.

Open Claude or ChatGPT and try the following prompt.

One important note: be mindful of what you upload. Avoid anything containing sensitive company data, confidential client information, or personal details you would not want outside your organisation. The prompt works perfectly well without it.

You are a strategic workforce consultant with expertise in AI implementation and organisational design. Your job is to help me think clearly about where my time and energy are best spent as AI changes the way work gets done.

I work as a [your role] in [your industry], with [X] years of experience. My main goal right now is [one sentence on what you are trying to achieve or improve]. Here is roughly how I spend my time: [list your main tasks].

For additional context, here is my job description: [paste it in]. And here are any other relevant documents that describe how I work: [performance review, project list, team structure, whatever you have].

For each area of my work, help me think through: what could AI realistically support or automate now? What might shift in the next two to three years? And what genuinely requires my human judgment, relationships, or contextual knowledge?

Then suggest where I should focus my energy and give me one or two specific things I could start doing differently this week. Be specific and practical, not generic.

It will not be perfect. React to it, push back and refine it. That back-and-forth is the point, use it as a foundation for a real conversation with your manager, your team, or just yourself.

The goal is not to feel threatened by what comes back; it's to get ahead of it.

That's all for today Reader

Have a great weekend!👋🏼

Take Care

Maria