Gartner: Many People Laid Off in Favor of AI Will Need to Be Rehired

Gartner predicts that by 2029, 30% of employees laid off due to replacement by AI will need to be rehired, often at a significantly higher cost.

While workforce cuts may deliver short-term financial gains, they deplete talent pipelines and erode institutional knowledge, according to the market researcher. With labor force growth flat or declining worldwide, competition for the talent organizations need will be high, ultimately increasing recruitment, training and onboarding costs.

“When business and IT executives look back on the early AI-era, they will realize their greatest mistake was believing that work automation was the point, when workforce amplification was the opportunity,” said Tori Paulman, VP Analyst at Gartner. “The competitive advantage will go to the CIOs and business executives who build an AI-shaped organization where AI value compounds by reshaping roles and allowing workflows to cross traditional boundaries, increasing velocity and reducing friction.”

“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,” Paulman added. “Instead, they should develop a “talent remix” strategy that uses AI to reshape roles and redirect workers from less productive work to new opportunities.” said Paulman.

The Gartner 2026 Hype Cycle for the Future of Work shows that as early AI investments hit the Trough of Disillusionment the challenge facing CIOs and business executives is no longer technological; it is using AI to amplify human intelligence, expertise and creativity.

Gartner predicts that by 2027, 75% of organizations that prioritize capturing AI productivity gains as cost savings will be eclipsed by competitors that aggressively reinvest those gains into innovation, modernization and upskilling.

Channel Impact^®
As AI becomes embedded in more business processes, organizations face a growing risk that context, human judgement and institutional knowledge could be lost. Future-ready companies will design systems that strengthen decision quality, maintain human oversight and ensure workers understand not only how a process is performed, but also why it is performed that way. Channel partners can play an influential role in facilitating this journey.