New report reveals the consequences of widespread AI-caused layoffs
Two in three employers that reduced headcount because of artificial intelligence are already rehiring laid off staff, as most express regret over how they handled the AI-led retrenchments.
This is according to a new study from Careerminds, which polled 600 HR professionals in February 2026 who made layoffs in the last 12 months.
It found that 32.7% of organisations that conducted AI-led layoffs had already rehired between 25% to 50% of the roles they initially let go.
Another 35.6% said they had already rehired more than half of the roles that they cut.
According to the findings, the rehiring also took place quite shortly after the layoffs occurred. More than half of HR leaders (52.1%) said they rehired for previously eliminated roles within just six months.
Some 17.8% said they began rebuilding their workforce within three months, while 2.1% said they waited for over a year.
The findings paint a bleak future for the expanding list of organisations that have announced headcount reductions as a result of AI adoption in their workplace.
Instant layoff regrets
The backpedalling observed in Careerminds' report comes in the wake of widespread consequences experienced by HR leaders following the retrenchments.
According to the findings, more than half of HR leaders said AI required more human insight than anticipated.
More than 20% also said their AI tools underperformed or did not deliver as expected.
Just 21.4% of the respondents said AI fully replaced roles with no operational issues, while 66.1% of HR teams said only some roles were replaced successfully with automation.
The widespread redundancies also led to the loss of critical skills and expertise in the workplace, according to a third of HR leaders.
More than a quarter also reported that their remaining workforce just did not have the skills to fill the gaps left by other employees.
What would they do differently?
According to the findings, 41.2% of HR leaders said they would approach the AI-driven redundancies differently if given the chance.
Another 50.3% said they would make selective changes, such as rethinking which specific roles were cut, rather than overhauling the entire approach.
Over half of HR leaders said that up to a quarter of roles that were made redundant could have been transitioned to a different role with the right redeployment support in place.
Another 28.3% of HR teams said 26% to 50% of roles had redeployment potential.
Despite the redeployment potential, 55.1% of the respondents said reskilling and redeployment were not formally discussed or considered.
HR leaders said they would have been able to make more informed decisions in AI redundancies had their organisations had a clearer understanding of the technology's capabilities.
More data on employee capabilities and skills would also be helpful, according to another 40% of HR teams. A third, on the other hand, said the ability to test workforce change scenarios before committing to them would have made a significant difference in their approach.
"What ties all these findings together is that the organisations that struggled the most were making significant, irreversible decisions without the full picture of AI capabilities and what a reduction would do to their workforce," the report read.
