AI AND ML

Gartner reckons nearly a third of displaced employees may be rehired by 2029 – at a premium

Gartner forecasts that, by 2029, nearly a third of employees laid off because of AI will need to be rehired, often at significantly higher cost.

The global research firm warned that workforce cuts could save money in the short term but risk weakening talent pipelines and eroding institutional knowledge over the longer term. With labor force growth flat or declining worldwide, competition for talent would drive up recruitment, training, and onboarding costs.

“When business and IT executives look back on the early AI era, they will realize their greatest mistake was believing that work automation was the point, when workforce amplification was the opportunity,” said Tori Paulman, VP analyst at Gartner.

“The competitive advantage will go to the CIOs and business executives who build an AI-shaped organization where AI value compounds by reshaping roles and allowing workflows to cross traditional boundaries, increasing velocity and reducing friction.”

Gartner predicted that, by 2027, three-quarters of organizations prioritizing cost savings from AI productivity gains will be overtaken by competitors that reinvest those gains in innovation, modernization, and upskilling.

“Business and IT executives who use AI primarily as a tool for cost cutting risk making reductions that are too deep and too soon, affecting their ability to innovate their business model and compete in new markets as AI continues to mature. Instead, they should develop a ‘talent remix’ strategy that uses AI to reshape roles and redirect workers from less productive work to new opportunities,” said Paulman.

Gartner advised organizations to use AI to “enhance human capability while preserving accountability.”

“The most successful enterprises will use AI to strengthen employees’ judgment, creativity, leadership and decision making rather than replace them,” Gartner said.

The technology industry has already supplied some prominent examples of companies cutting jobs while expanding their use of AI.

Oracle’s workforce shrank by 21,000 over the last year, according to its annual report, which said the “adoption and deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce.”

If Gartner is right, Oracle may end up paying for those cuts in the long run. ®