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AI-related layoffs have captured everyone\u2019s attention lately. Last month, Meta laid off 10% of its workforce\u2014just months after committing up to $135 billion toward AI development this year.
Other companies, such as Cloudflare, Coinbase, and PayPal, have also laid off or plan to lay off employees as they become “AI native.”<\/p>\n
Last year, a report from Forrester Research<\/a> highlighted that 55% of employers regretted their decision to lay off staff due to artificial intelligence. And a Gartner prediction<\/a> published earlier this year claims that 50% of all companies that replaced customer service or operational employees with AI will be forced to restaff those roles under different titles by next year.<\/p>\n A trend called the \u201cAI boomerang\u201d effect is emerging: Companies that laid off employees due to AI or automation are now rehiring for those roles for a number of reasons.<\/p>\n According to new research from the consulting firm Robert Half that was reviewed by Fast Company<\/em>, nearly a third (32%) of hiring managers say that their organizations eliminated a role or let someone go primarily due to productivity gains from AI or automation, only later to rehire for that exact role.\u00a0<\/p>\n \u201cCompanies that moved too quickly on AI are now seeing where it falls short in practice,\u201d says Megan Slabinski, district president of technology talent solutions at Robert Half. \u201cWhile they may have seen early efficiency gains, those efforts also surfaced gaps in quality, oversight, and decision-making, especially as business demands picked up.\u201d<\/p>\n \u201cIn many cases, organizations have had to reassess their expectations, recognizing that while AI can be effective in certain areas, it’s not the end-all-be-all solution some initially believed it would be,\u201d Slabinski adds. \u201cThat’s prompting leaders to consider the shift from cutting roles to rethinking them instead, with a clearer understanding of where AI works best alongside their employees, not in place of them.\u201d<\/p>\n The survey is based on responses from 2,000 U.S. hiring managers across a range of industries. Of the group, finance (44%), tech (32%), and HR (35%) were the sectors with the most hiring managers who say they have rehired for the same roles\u2014but marketing and creative, legal, healthcare, and administrative and customer support followed closely behind.<\/p>\n \u201cWhile it varies by industry, it’s mostly areas where AI may be able to support the work but can’t fully own the outcome,\u201d Slabinski says. \u201cOur data shows companies are rehiring positions that rely more on institutional knowledge, relationship building, or simply more hands-on support.\u201d<\/p>\n Of those hiring managers, 40% say that they rehired because the role required institutional knowledge or context that AI couldn’t replace. <\/p>\n More than a third (35%) say that the productivity gains were smaller than expected, and 38% say that AI required more human oversight or quality control than expected. Other reasons included an increase in business demand, risk or compliance concerns without a human in the role, team burnout or workload strain, and AI tools not being fully adopted or used consistently across teams.\u00a0<\/p>\n \u201cAt a broader level, I think it reflects a realization that they are missing some skills that can’t be automated, like judgment, cross-collaboration, and accountability,\u201d Slabinski says. \u201cThe \u2018boomerang\u2019 effect is often more about the role being brought back than the same person\u2014although candidates who can step in quickly with strong industry experience are especially appealing.\u201d<\/p>\n Some CEOs are struggling to see the ROI on AI, which, it turns out, is really <\/em>expensive. Uber recently capped its employees\u2019 monthly AI spend budget, while Microsoft canceled its Claude Code licenses to mitigate spend and focus on using in-house models instead. Uber’s co-president and COO, Andrew Macdonald, said in a podcast episode last week that \u201cit\u2019s very hard to draw a line\u201d between AI adoption and new consumer products.\u00a0<\/p>\n Other CEOs have been vocal about how humans will need to work with AI. <\/p>\n