Companies that cut jobs primarily to replace workers with artificial intelligence could eventually be forced to rehire a significant portion of those employees, often at a higher cost, according to Gartner. The research firm estimates that by 2029, as many as 30% of employees laid off because their work was replaced by AI may need to be rehired.
AI Job Cuts Could Create New Costs
Gartner warned that workforce reductions may provide immediate savings but could create longer-term problems for companies.
Large-scale layoffs can weaken internal talent pipelines and remove institutional knowledge that is difficult to recreate. As organisations later discover that certain human capabilities are still required, they may have to recruit experienced workers from outside the company.
With labour-force growth expected to remain flat or decline in many parts of the world, competition for skilled employees could increase recruitment, training and onboarding costs.
Companies May Be Cutting Too Deep
Gartner analyst Tori Paulman said businesses risk making reductions that are “too deep and too soon” if they treat AI primarily as a cost-cutting tool.
Instead, companies should use AI to redesign jobs and move employees away from less productive tasks towards new responsibilities.
The idea is that AI should amplify human capabilities rather than simply eliminate positions. Employees can use AI to improve productivity while continuing to provide judgement, creativity, leadership and decision-making.
Four Changes to the Future of Work
Gartner identified four major shifts that organisations should consider as AI becomes more deeply integrated into workplaces.
The first is human-AI collaboration, where AI supports employees while humans retain accountability for important decisions.
The second is creating an AI-ready workforce that can continuously learn and adapt. This includes improving AI literacy, digital skills and the ability to work across disciplines.
The third involves preserving context, judgement and institutional knowledge. Gartner argues that organisations need systems that help employees understand not only how a process works, but also why it works that way.
The fourth is creating a foundation for long-term value from AI rather than focusing exclusively on immediate cost savings.
Innovation Could Be More Valuable Than Cost Savings
Gartner predicts that by 2027, 75% of organisations that focus primarily on converting AI productivity gains into cost savings will be overtaken by competitors that reinvest those gains into innovation, modernisation and employee upskilling.
This suggests that companies may gain a stronger competitive advantage by using AI-driven productivity improvements to expand their capabilities rather than simply reducing headcount.
Early-Career Roles Face Particular Risk
The concern is especially relevant to early-career positions, where repetitive and highly structured tasks are often among the first to be automated.
Eliminating these roles can reduce the pool of employees who would traditionally gain experience and eventually move into specialist and management positions.
Companies that remove those entry-level pathways could later find themselves short of experienced talent and forced to hire externally at higher costs.
AI Workforce Strategy Is Changing
Gartner’s forecast does not mean that 30% of all workers displaced by AI will definitely return to their previous employers or jobs. Rather, it highlights the potential cost of workforce decisions made without considering long-term talent requirements.
The research firm is urging businesses to develop a “talent remix” strategy, using AI to reshape roles and redirect employees instead of treating automation purely as a reason to eliminate jobs.
Summary: Gartner predicts that up to 30% of employees displaced because of AI could need to be rehired by 2029, potentially at higher costs. The firm warns that aggressive AI-driven layoffs could damage talent pipelines and erase institutional knowledge. It recommends using AI to augment human capabilities, redesign jobs, retain critical expertise and reinvest productivity gains into innovation, modernisation and upskilling.
