Companies that bet on AI are now rehiring laid-off employees

Many companies that previously downsized staff with the expectation that artificial intelligence would replace human labor are now bringing those workers back.

According to new data from analytics firm Visier, this trend suggests that automation technologies are not yet delivering the level of replacement that executives expected.

Visier analyzed workforce data from 2.4 million employees across 142 companies worldwide. The study found that 5.3% of laid-off employees have since been rehired by their former employers — a rate that had remained stable for years but has recently begun to rise. Visier’s research director Andrea Derler notes that the uptick is tied to the real-world limitations of AI tools and the realization that human oversight is still needed in processes once assumed to be fully automatable.

AI systems can indeed improve efficiency, but in practice they tend to automate individual tasks rather than entire roles. This introduces new challenges, including a shortage of people capable of managing and correcting algorithmic output, as well as rising implementation and maintenance costs for AI infrastructure.

“Many senior executives have not yet had the time to assess the true cost of deploying AI at scale or to determine which roles can realistically be automated. Building AI infrastructure — hardware, data pipelines, security frameworks — requires major capital investment. These costs often exceed initial projections, forcing management to reconsider the return on investment compared to retaining skilled employees,” Derler explains.

A separate study from MIT supports Visier’s findings: 95% of companies have not yet seen meaningful financial gainsfrom their AI investments. Researchers argue that organizations often direct spending toward AI initiatives without a clear strategy for how these systems will generate revenue or integrate into existing workflows.

Moreover, the supposed savings from layoffs can turn out to be misleading. Data from Orgvue shows that companies spend about $1.27 for every $1 saved through workforce reductions, once severance, compensation, and productivity losses are factored in. As a result, many businesses are rethinking their automation strategies and returning to the value of human labor.