Gartner study: AI-driven layoffs failing to deliver ROI for corporations
80% of firms cut jobs despite AI not generating returns, study finds.
A new Gartner study challenges the prevailing narrative that AI automation will inevitably replace white-collar workers and drastically cut labor costs. Surveying 350 global business executives from companies with at least $1 billion in annual revenue, the research found that 80% of firms that piloted AI or autonomous technologies reduced their workforce. Critically, these layoffs occurred regardless of whether the AI investments had generated any measurable returns. Helen Poitevin, VP analyst at Gartner, told Fortune that fixating on layoffs is shortsighted: “Chasing value only through headcount reduction is likely to lead most organizations down a path of limited returns.” The findings suggest many companies are jumping to cut jobs based on the promise of AI rather than proven productivity gains.
Meanwhile, other analysts offer a more optimistic long-term view. Apollo chief economist Torsten Slok invoked the Jevons paradox—a 19th-century economic theory that explains how more efficient steam engines actually increased coal demand. Slok argues that AI will similarly create more jobs by lowering costs and expanding use cases. The debate underscores a critical tension: while short-term layoffs may appease investors, sustainable value from AI likely requires rethinking workflows and investing in new roles rather than simply automating existing ones.
- 80% of executives at billion-dollar firms reduced headcount after AI pilots, even when AI didn't generate returns.
- Gartner analyst Helen Poitevin warns that cost-cutting via layoffs alone ignores AI's broader value creation potential.
- Apollo's Torsten Slok cites the Jevons paradox: AI efficiency may spur more jobs, not fewer, by lowering operational costs.
Why It Matters
The research underscores that AI ROI depends on strategy, not just automation—blind layoffs risk undermining long-term growth.