The ‘AI boomerang’: Why some companies are rehiring employees they laid off due to AI

AI-related layoffs have captured everyone’s attention lately. Last month, Meta laid off 10% of its workforce last month as it announced earlier this year that it would spend up to $135 billion on AI initiatives. Other companies like Cloudflare, Coinbase and Pay Pal have also cut or plan to lay off employees as they become “AI native.” Last year, a report from Forrester highlighted that 55% of employers regretted their decision to lay off staffers due to AI. Another Gartner prediction published earlier this year claims that 50% of all companies that replaced customer service or operational employees with AI will be forced to re-staff those roles under different titles by next year. Now, a trend called the “AI boomerang” effect is emerging: companies that laid off employees due to AI or automation are now rehiring for those roles, for a number of reasons. According to new research from consulting firm Robert Half reviewed by Fast Company, 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, and then later rehired for that same role. “Companies that moved too quickly on AI are now seeing where it falls short in practice,” Megan Slabinski, district president of technology talent solutions at Robert Half said. “While they may have seen early efficiency gains, those efforts also surfaced gaps in quality, oversight and decision-making, especially as business demands picked up.” “In 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,” Slabinski added. “That’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.” The survey is based on responses from 2,000 U.S. hiring manage