Gartner forecasts that nearly a third of employees laid off because of artificial intelligence will need to be rehired by 2029. These future hires will often come at a significantly higher cost.
The global research firm warns that workforce cuts might save money in the short term. However, these cuts risk weakening talent pipelines and eroding institutional knowledge over the longer term.
Labor force growth remains flat or declining worldwide. This shortage means competition for talent will drive up recruitment, training, and onboarding expenses.
Tori Paulman, a VP analyst at Gartner, shared her perspective on executive strategy. She noted that business and IT leaders will eventually view their belief in pure work automation as a mistake.
Paulman explained that workforce amplification represents the true opportunity. Competitive advantages will favor executives who build AI shaped organizations rather than simply cutting jobs.
Gartner predicts that three quarters of organizations prioritizing cost savings from AI productivity gains will fall behind competitors by 2027. Rivals who reinvest those gains in innovation, modernization, and upskilling will pull ahead.
Paulman warned that executives using AI primarily for cost cutting risk making reductions that go too deep and happen too fast. This damages their capacity to innovate and compete in new markets.
Instead, leadership should develop a talent remix strategy. This approach uses AI to reshape roles and redirect workers from less productive tasks toward new opportunities.
Gartner advises organizations to use AI to enhance human capability while preserving accountability. The most successful enterprises will use technology to strengthen judgment, creativity, leadership, and decision making.
The technology industry already provides prominent examples of companies trimming staff while expanding AI use. Oracle saw its workforce shrink by 21,000 people over the last year.
Oracle noted in its annual report that the adoption and deployment of AI technologies across operations resulted in workforce reductions. The company warned these cuts may continue.
If Gartner's projections prove accurate, companies like Oracle may end up paying heavily for their workforce reductions in the long run.
