Many organizations rushing to cut staff in the name of AI efficiency are expected to quietly rehire those roles – often “offshore or at lower salary.”
According to Forrester’s “Predictions 2026: The Future Of Work” analysis, half of AI-attributed layoffs are likely to be reversed.
“Many companies claim to be cutting jobs due to AI. Some of these efforts yield spectacular failures… Other times, AI isn’t actually replacing human workers at all. Too often, the C-suite lays workers off for the future promise of AI,” says the report.
Forrester’s analysis found that using AI for financially driven layoffs can backfire: 55 percent of employers regret laying off workers because of AI. More people in charge of AI investment expect it to increase headcount (57 percent) than to decrease it (15 percent) over the next year.
“We predict that much of this work will be given to lower-wage human workers, offshore or at lower salary,” the report adds. The impact may be most pronounced in HR, where teams are adopting a flood of AI tools.
Staffing in the HR function could be cut by half, even as it’s expected to deliver the same level of service with the help of AI-driven talent and workforce planning systems. “Many will turn to vendors’ AI-washed product offerings to give them at least the appearance of AI readiness, with only a few armed with the [ability] to discern legit tech from vaporware.”
In June, rival research firm Gartner predicted that more than 40 percent of agentic AI projects would be cancelled by the end of 2027 due to rising costs, unclear business value, or insufficient risk controls.
In the field of CRM, a benchmark developed by academics showed that LLM-based AI agents perform below par on standard tests and fail to understand the need for customer confidentiality. The team led by Kung-Hsiang Huang, a Salesforce AI researcher, showed that using a new benchmark relying on synthetic data, LLM agents achieve around a 58 percent success rate on tasks that can be completed in a single step without needing follow-up actions or more information.
Some organizations, including Klarna and Duolingo have subsequently revisted their aggressive AI strategy.
Nonetheless, the tech industry has seen a steady march of job losses as its leadership brags about the dogfooding of AI products. In September, Salesforce CEO and co-founder Marc Benioff said the company had slashed 4,000 customer support roles through the application of AI agents. The company said it no longer needed to backfill support engineer roles and was redeploying staff elsewhere in the business.
Earlier this week, Amazon announced 14,000 corporate job cuts, citing the accelerating impact of artificial intelligence for changing how the company operates.
Source – https://www.theregister.com/2025/10/29/forrester_ai_rehiring/