Some Organisations Think It's Wrong To Use AI To Cut Headcount

Uploaded on 2025-05-19 in TECHNOLOGY-Key Areas-Artificial Intelligence, NEWS-Cybersecurity News, FREE TO VIEW

As Artificial Intelligence (AI) increases job losses a lot of technology managers say they may have created longer-term problems by cutting staff in favour of the technology.

According to a recent report from Orgvue, over a third (39%) of business leaders in the UK made employees redundant as a result of AI adoption in 2024, but more than half (55%) have said they acted too hastily.

The study, which surveyed 1,000 C-suite and senior decision makers at medium and large organisations, highlights the rash approach to AI adoption at many enterprises, according to Orgvue CEO Oliver Shaw. “While 2024 was the year of investment and optimism, businesses are learning the hard way that replacing people with AI without fully understanding the impact on their workforce can go badly wrong,” he said.

“We’re facing the worst global skills shortage in a generation and dismissing employees without a clear plan for workforce transformation is reckless.Some leaders are waking up to the fact that partnership between people and machines requires an intentional upskilling program if they’re to see the productivity gains that AI promises.”

According to Ozgur Turetken, Professor at Toronto Ted Rogers School of Information Technology Management in Toront the reported leadership miss-steps are a predictable outcome of a situation that is spinning out of control. “The technology is changing so fast that by the time you figure out the capabilities of the technology, that was technology of yesterday,” he says.

The Skills Shortages Have Sharpened Focus on Staff Training

Some 80% of business leaders said they plan to reskill employees to use AI in the workplace, for example, while 41% have increased budgets to ramp up AI training schemes and opportunities for staff.

Increasing AI skills has become a strategic imperative for many tech leaders, according to Orgvue. More than one-third (35%) of respondents said a lack of expertise in this domain is one of their biggest challenges moving forward.

Yet despite a razor sharp focus on AI adoption, many still struggle with how to measure success and identify clear use-cases. One-in-four don’t know which roles can benefit the most from AI, for example, while 30% don’t know which roles are at most risk from automation.

To gain a clearer understanding of the long-term impact, nearly half (43%) said they are working with third-party organisations to prepare their workforces. This, Orgvue noted, marks a 6% increase compared to the year prior. In particular, Orgvue noted that while tech leaders reported regret over “questionable redundancy decisions”, this doesn’t mean workers remain safe.

Business leaders admitted they feel “less responsible” to protect their workforce from redundancies, the study warned, with 62% highlighting their responsibility in this regard compared to 70% in the year prior.

AI Remains A Key Focus for Companies

Despite these bumps on the road, tech leaders polled by Orgvue said they remain upbeat about the potential of AI in the long run. Nearly three-quarters (72%) of leaders told the firm that AI will be the “dominant driver” of workforce transformation in the next three years. It’s this optimism that is fuelling further investment in the technology.

Four-in-five (80%) of businesses that invested in 2024 set to ramp up investment in 2025, for example.

Similarly, 76% of business leaders said they’re confident that their enterprise will be “taking full advantage of AI” by the end of 2025.

According to Shaw. “As in 2024, businesses remain confident that AI will solve their biggest business challenges and will define how they structure their organisation and workforce in the future.. But our research suggests this confidence could be misplaced.”

While some corporate decision makers are it’s encouraged to see investment in AI continue to grow, businesses need a better understanding of how the technology will change their workforce in the near future.

"Questions remain unanswered over whether AI will yield enough return on investment in the near term to justify the costs associated with lost talent.” Shaw concludes.

Image: Ideogram

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