New Gartner report reveals the 'greatest mistake' of employers in the AI era
Employees who are laid off as a result of artificial intelligence adoption will need to be rehired by 2029, according to a new Gartner forecast, as it spelled out the consequence to organisations' "greatest mistake" in AI adoption.
Gartner's latest forecast predicts that 30% of employees laid off due to replacement by AI will need to be rehired, and often at a significantly higher cost.
It comes as AI emerges as the leading reason for layoffs in the United States, and has been cited in 116,175 job cut announcements since January 2026, according to Challenger, Gray & Christmas data.
But Gartner warns that AI-driven workforce cuts can deplete talent pipelines and erode institutional knowledge.
"When business and IT executives look back on the early AI-era, they will realise their greatest mistake was believing that work automation was the point, when workforce amplification was the opportunity," said Tori Paulman, VP Analyst at Gartner.
"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."
Four shifts to an AI-shaped workforce
Paulman advised organisations to develop a "talent remix" strategy that uses AI to reshape roles and redirect workers to new opportunities.
"The competitive advantage will go to the CIOs and business executives who build an AI-shaped organisation where AI value compounds by reshaping roles and allowing workflows to cross traditional boundaries, increasing velocity, and reducing friction," he said.
Gartner identified four shifts that will influence how organisations navigate the evolving human-AI workforce landscape.
The first shift involves expanding human capability through the human-AI relationship, treating AI as a "toolmate" that strengthens employees' judgment, creativity, leadership and decision-making rather than replacing them.
"Technologies that can help enable this shift include AI avatar of the employee, AI toolmate, digital coaching applications, employee digital twin and emotion AI," the Gartner report read.
The second shift focuses on building an AI-ready workforce, in which Gartner encouraged organisations to invest in AI literacy, skills management, digital dexterity and workstyle analytics, and ensure executives are "AI savvy."
The third shift calls on organisations to design systems that preserve context and institutional knowledge as AI becomes more embedded in business processes, maintaining human oversight and ensuring workers understand not just how a process works but why.
The fourth shift involves reinvesting AI productivity gains into innovation, modernisation, and upskilling rather than treating them as cost savings, to build a foundation for long-term success.
