Gartner Report Finds AI Layoffs Do Not Increase ROI

A survey of 350 global executives at companies with at least $1 billion in annual revenue reveals that AI-driven headcount reductions do not correlate with higher return on investment. While 80% of these organizations reported workforce reductions—some as high as 20%—the data shows that firms eliminating the most staff generate financial returns nearly identical to those cutting the fewest.

Gartner Inc. analysts argue that CEOs often use layoffs to demonstrate quick AI returns, but such moves create budget room rather than actual value. The firm suggests that high-ROI organizations prioritize people amplification by investing in upskilling and new operating models that allow humans to govern and scale autonomous systems. This finding is supported by Federal Reserve data showing that while repetitive roles are declining, overall job postings in AI-adopting firms have not dropped.

Some companies have already experienced operational failures after aggressive automation. Klarna rehired staff after cutting 700 customer service roles led to a decline in quality, and International Business Machines Corporation reversed HR automation after systems failed to handle judgment calls. Conversely, Meta Platforms Inc. and Standard Chartered have continued with restructuring and layoffs linked to automation.

Gartner Inc. predicts AI will be a net-positive job creator by 2028 or 2029. While the firm estimates 6 million roles will be automated globally by 2029, these losses are expected to be offset by the transformation of 32 million roles annually and the emergence of new business models.