Our AI future should be focused on collaboration instead of replacement.
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Everyone talks about how hard it is to find good people, but what about how hard it can be to hang onto them? We spend time and money recruiting talent, but we spend far less time talking about how easily we lose it. All too often, good people get caught in the crosshairs, and with the arrival of AI, more of them are being laid off.
According to a Forbes article by Ron Schmelzer published July 14, this January, Brookings researchers estimated that 37.1 million U.S. workers sit in the top quartile of occupational AI exposure. Most of those workers have a strong capacity to adapt, meaning they may have transferable skills, savings, credentials, or deep local job markets, the article says. A smaller group, 6.1 million workers, face both high exposure and low adaptive capacity. Brookings found that this vulnerable group is primarily located in clerical and administrative occupations, and 86 percent are women. They also found the risk is tied to local labor markets, including college towns, state capitals, and mid-sized regions with a large base of exposed office work. These people, some of them good workers, good people, are losing their jobs. They aren’t underperforming. They’re just caught in changing economic and value systems.
AI or Something Else?
Now, here’s the question more people are asking out loud: Is AI replacing workers or providing an excuse for job cuts? A New York Times article published in June reported that more than 150 technology companies had already cut at least 115,000 employees, according to Layoffs.fyi, which tracks job cuts in the industry.
The article goes on to report that a large body of research and analysis confirms that AI is frequently used as a convenient public scapegoat to justify corporate restructuring, to hide overhiring from previous years, and to appease Wall Street. Studies show that the technology is rarely the primary cause for widespread job replacement.
Writing for Forbes, Mary Whitfill Roeloffs quotes Jason Droege, CEO of AI infrastructure company Scale AI, who said CEOs are hiding behind the excuse of AI to reduce headcount and make cuts that would otherwise be considered ordinary “right-sizing.” Here’s the ugly part. Some of those “headcounts” are good people, high performers, who are simply caught in the slaughter. Firing, like hiring, requires discernment. We’re not supposed to play with people’s lives.
Early in my first CEO role, I promoted an individual who had everything needed to change performance and build a team that could get results. This individual understood their role, supported team members, and delivered results without question or worry. Furthermore, they lived the mission and values, encouraged feedback, and celebrated successes. Sounds too good to be true? It was true, but it didn’t matter when the financial realities hit.
We were losing far more money than we thought, and our revenue base couldn’t support our cost structure. Nor could we support the operating model (specifically, a robust matrixed service line structure) that our original strategy distinctly demanded. This individual was leading an area that fell off our adapted plan and new priorities, and they simply got caught up in the mess. If there is a happy ending in all this, the former employee is a CEO in their own right today, a position both earned and deserved. Still, really good people get caught up in these messes, and it’s not OK. Too many exceptional people become casualties of decisions that have little to do with their job performance.
Reversing the Trend?
According to CNBC, as of July 1, Ford is reportedly rehiring hundreds of experienced human engineers to address quality issues that automated systems couldn’t resolve. Furthermore, CNBC reported that Commonwealth Bank of Australia and IBM are also refocusing on human capital after making layoffs while investing in artificial intelligence technology. So, yes, the companies regretted their decisions to replace people with AI. They’ll find new people, and maybe some of the old ones will come back. The good people they terminated are gone forever, though.
We in corporate America are in love with the promise of AI, and we’re making decisions based on a promise, which is dangerous. Asking someone to leave is the most important decision you will make as a leader. Make sure it is well thought out.
Why don’t we start by doing what many of these companies are doing after the proverbial barn door is open? While we’re budgeting for tech, why don’t we invest in training or upskilling teams to prepare them to leverage AI? Why don’t we focus on collaboration versus replacement? Maybe then we won’t spend millions trying to recruit the very talent we chose to terminate.
AI is not an excuse for layoffs. I may have written the book on firing, but I believe wholeheartedly that it’s a tool that, in skilled and compassionate hands, can refocus and even save an organization. But there are times, and this is one of them, when it’s the wrong thing.
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