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• Some firms cut jobs due to AI and regret their decisions.
• Smart business leaders focus on value creation instead.
• They help professionals find new avenues to growth. 
  

Defaulting to AI-enabled layoffs is often seen as a shortcut to cost-cutting. Specialist site jobloss.ai, which tracks AI-enabled layoffs, reported that 126,000 US employees lost their jobs between January 2025 and June 2026 due to AI-related factors.

Ankur Anand, group CIO at recruiter Harvey Nash, told ZDNET it's easy to see why many executives regard AI deployment as a pathway to cost-cutting.

Also: 'Specialists aren't required' anymore: How to stay valuable in an AI agent workplace today

"Early messages from vendors, consultants, and even some boards have focused on productivity, automation, and doing more with less," he said. "Headlines about AI‑related layoffs reinforce the idea that the fastest route to value is through fewer people."

This default position paints a grim picture for professionals anxious about AI-enabled job cuts.

However, replacing workers with AI is no guarantee of success. In fact, a growing body of evidence suggests many businesses are beginning to recognize the limitations of AI and even regret some of their job-cut decisions.

Research from Careerminds found that slashing jobs is unlikely to create the value senior executives crave. Three-quarters of organizations found AI layoffs cost more than they saved, and as many as nine in 10 companies would rethink them given the chance.

Such is the sense of regret that analyst Gartner estimates 50% of companies that attributed headcount reduction to AI will rehire staff to perform similar functions by 2027.

Also: Companies embracing AI the most are hiring more people - including entry-level

In short, suggested Anand, firms that treat AI mainly as a cost‑cutting tool are missing the bigger opportunity -- allying technological capability with human excellence to generate new value for the business.

"If your AI strategy starts and ends with headcount, you are using a growth technology to run a shrinkage plan," he said. "The leaders who win will use AI to create new value, not just cut costs."

Steve Lucas, CEO at integration technology specialist Boomi, told ZDNET that the starting point for value-based considerations should be a big dollop of circumspection about AI-enabled layoffs.

While emerging tech will change roles and responsibilities, many of the job cuts attributed to AI -- particularly in the IT industry -- are companies looking for a convenient excuse.

"The reality is that AI will have a massive impact on jobs," he said. "Some of it will be negative, but a lot of undue blame is being laid at the feet of AI today as a matter of convenience, by a lot of tech executives, when these are just layoffs -- that's what they are."

Also: AI is getting better at your job, but you have time to adjust, according to MIT

Lucas said professionals should question so-called experts who suggest AI will mean the end of work as we know it. After all, these are still early days for automation.

"We don't understand the change, and we can't fully see past it, and anyone who says they do is selling something," he said, before suggesting that pioneering companies will find ways to embrace AI to the advantage of their human workforce.

"I am an AI optimist for a long list of reasons," he said. "I believe that AI will help us live longer, healthier lives and make us profoundly more productive as a society."

Stephen Wood, chief operating officer at financial services firm Rathbones Asset Management, is another business leader who believes the impact of AI on the workplace will be positive rather than negative.

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He referred to the legal industry, where experts regularly assert that AI will disrupt employee roles and responsibilities. AI can do some of the work, but it has significant limits.

"The reality is that, yes, generative AI could do the job of a paralegal; it can go through untold amounts of cases, and, if you can get it not to hallucinate, it can write up everything you need to know," he told ZDNET. "However, how does anyone then become the lawyer who stands in the court during the case? You need to have people -- you need the experts."

Wood said he sees similar trends in his own industry. AI can be used to pick up some tasks, but not at the expense of human talent.

Also: How Workday and other software providers plan to survive AI

"I'm not thinking in any way that this is a technology that removes people. It certainly stops me from needing to hire as many people as possible, and it certainly makes me be able to do more, and it makes my people able to do more," he said.

"But ultimately, those skilled people still need to be there, and you still need to educate them, and they should benefit from AI, rather than let it be to their detriment."

Education is also a key part of the process for Tim Chilton, managing geospatial consultant at the UK mapping agency Ordnance Survey, who acts as his organization's internal AI champion.

One of his exploratory use cases centers on deploying Snowflake agentic AI technologies. Chilton told ZDNET that the initiative aims to give staff a chatbot-style interface that provides timely access to statistics, such as for a last-minute sales call, that might otherwise have taken days or weeks to surface.

Also: The 3 types of people who will excel in the AI agent era, according to tech leaders

In short, the initiative's objective is to enable existing staff via innovation, rather than replace human talent with AI.

"That's the approach we're trying to promote within our customer team," he said. "If you get on board with AI, you're going to be in charge and empowered as a team to use the best of this technology."

Internal professionals at the Ordnance Survey are even encouraged to define the balance between technological and human agency.

"They can say when enough is enough," he said. "And Snowflake has a limit for us. I don't want AI across everything. So, we're finding out where that balance is, where AI is usefully put into business workflows, and where it doesn't have a place now."

Also: AI agents are your new colleagues - how to get the best results

That kind of tightly defined process resonated with Harvey Nash's Anand, who said smart business leaders and their teams use AI to compress cycle times in critical processes, turning speed into revenue.

He gave these examples:

• Professional services firms are using gen AI to complete valuations and due diligence in days rather than weeks.
• AI-enabled software development teams are shipping features faster and capturing market opportunities sooner.
• Pharmaceutical firms are using AI authoring tools to reduce errors in clinical documents and regulatory filings.

Perhaps most importantly, said Anand, the effective exploitation of AI is not about slashing staff numbers but finding avenues to growth.

"The question is not whether AI will cut costs; it will," he said. "The real question is whether you will use it to build something bigger, better, and more valuable than what you have today."

Also: 40% of enterprises will scrap AI agents - 3 ways to ensure yours don't fail

Anand suggested business leaders and their teams looking to generate value from AI should focus on these five areas next:

1. Do not default to layoffs: Indiscriminate headcount cuts in anticipation of AI efficiency gains can destroy valuable knowledge and weaken your ability to innovate.  
2. Redesign work, not just reduce it: Use AI to reshape processes and roles, so humans focus on judgment, relationships, and creativity while AI handles routine work.  
3. Measure value beyond cost: Track cycle time, quality, scalability, new revenue, and risk reduction, not just labor savings. 
4. Invest in people: Reskill and upskill staff to work with AI and create new roles that leverage human strengths alongside machine capabilities.
5. Recognize that AI will change workforces over time: Create lasting value by using AI as a platform for growth, not just a lever for shrinkage.