Microsoft, Barclays, Kroger among latest firms citing AI in cuts
Companies around the world are increasingly citing artificial intelligence when cutting jobs, and some are now hiring workers back after discovering that AI models, applications and agents don’t perform as well as expected. Microsoft, Barclays Bank and supermarket chain Kroger are among the latest entries on a growing list of companies that have announced AI-related workforce reductions this year, including the elimination of jobs deemed redundant and positions shed to free up money for developing and deploying the technology.
The job cuts of the AI era are affecting tens of thousands of people, according to the Associated Press. How common reversals are is hard to know, but they are happening often enough to acquire trend status and a nickname: the “AI boomerang.”
“Two years ago, we said, ‘Would this happen?’ and now we’re saying, ‘Yes, it is happening in real time,’” said Lucy Beaumont, a global senior vice president at SHL, a U.K.-based technology company that develops employment-related tests and tools.
Hiring managers in industries such as finance, marketing, legal and healthcare told staffing and placement firm Robert Half they had hired people to do the same or similar work of jobs scrapped during AI-linked cutbacks because the roles required human oversight and skills such as relationship management or quality control.
“When you need critical thinking, collaboration, creativity, institutional knowledge, those are things that AI just can’t replicate,” said Bill Driscoll, a senior district president at Robert Half. “And I think that’s where companies are starting to realize, ‘Wow, we really do need people to do these jobs.’”
Klarna, the Swedish provider of buy now, pay later services, began recruiting human customer service representatives again last year. CEO Sebastian Siemiatkowski acknowledged in an interview with Bloomberg News that the company’s reliance on an AI chatbot to cut costs had gone too far.
In June, Ford said it had hired or promoted 350 veteran engineers after AI tools the automaker deployed to do quality control work did not perform at the expected level. “AI utilization has been an important part of our quality gains and that — along with deep technical expertise of our teams — is a powerful combination,” a Ford spokesperson told the Associated Press.
Companies don’t always broadcast their U-turns on shifting resources or responsibilities from employees to AI systems, Beaumont said. “Maybe their shareholders love that they did this right-sizing motion … and then they have to turn around and quietly, with their tail between their legs, admit that they weren’t ready for that or they shouldn’t have done that,” she said.
Rehiring reflects the invisible work employees do beyond their formal job descriptions, which companies often miss when they hand tasks to AI — sensing emotions and moods, holding impromptu meetings and putting in extra effort when feeling inspired or otherwise motivated, said Betsy Summers, a principal analyst on the Future of Work team at market research and advisory firm Forrester. “We don’t know all the work that’s required to do things well within the organization,” she said. “The citizenship behaviors of team cohesion and team building and making sure that you have trust within your team, none of that is accounted for. So when you rip out humans who are doing that work and then expect agents to be able to then deliver exactly what humans have delivered, they are frequently mistaken.”
Company procedures for tasks such as data processing and bookkeeping are also not always well documented, complicating the move to AI, experts said. “Organizations are not spending enough time doing the up-front work to really truly understand workflows and where humans add value in the process,” said Brooks Holtom, a professor of management at Georgetown University’s McDonough School of Business.
In roles such as customer service, AI agents and chatbots frequently need to refer questions and complaints to a worker who can read and understand emotions, interpret the level of severity or complexity and act creatively but within parameters, Holtom said. “It’s that combination of creativity but staying in the guardrail that’s really hard for a machine to figure out,” he said.
Workers weighing a return can lean into skills that are hard to automate, such as emotional intelligence, ethical decision-making and judgment based on experience, Holtom said. “Really try to be able to articulate, what’s your value proposition as a human?” he said. “Don’t be afraid to lean into the technology as well, and understand how to differentiate yourself from what machines do well. Embrace that, understand that, and you can become uniquely qualified to help with implementation.”
Empathy is another human quality that technology has not fully mastered, Beaumont said. “Think about an angry customer. They want to be listened to, they want to be heard, they really want a human on the other end of the line,” she said. “Can an AI replace that right now in a way that feels meaningful to individuals? Perhaps not.”
Many people don’t want to return to a company that laid them off, according to Beaumont. Those willing to consider going back during a reorganization around artificial intelligence are asking for more money and to know how AI might impact opportunities for promotion, she said. “To come back to a business where you’ve been let go, replaced by AI, to be asked back to that business, your trust is gone, your psychological safety there, your relationship with the employer, and that’s very, very difficult to build back,” she said.
Workers with rehiring offers can also ask to be upskilled and for a clear idea of what career growth at the company might look like for them specifically, Beaumont said. Holtom suggested seeking a commitment such as a one-year renewable contract that includes a buyout clause if the job is terminated in less than a year, and communicating ways to contribute value, such as becoming the final line of defense for quality control. A retail company worker, for example, could audit a chatbot’s conversations with customers and recommend improvements, he said. “In some ways, you could almost envision a higher role for yourself and sort of create a new job description that leverages the technology but also your expertise. So maybe you can get a raise in that process,” he said.
Summers cautioned against discounting the distinctly human values of motivation and curiosity, which she said make people efficient and effective. “Within our societies, work serves a broader purpose than just creating value for shareholders or customers or constituents,” she said. “Work serves a human purpose as well. It’s the manifestation of our search for meaning and purpose. We want to contribute to our communities as human beings.”