Companies laid off employees because of artificial intelligence. Some came to regret it.

Some large companies have begun to acknowledge the ineffectiveness of their attempts to replace people with algorithms, according to CNBC. Automotive giant Ford, Australia’s largest bank, the Commonwealth Bank of Australia, and IBM are rehiring employees after artificial intelligence failed to handle the tasks that had led them to cut staff.

Over the past three years, Ford has hired hundreds of experienced engineers, including some of its own former employees, Bloomberg reported in June. Their task is to train young professionals and resolve product quality issues that automated systems were unable to address and that have cost the automaker billions of dollars.

“We mistakenly believed that simply by implementing artificial intelligence and feeding it our design requirements, we would end up with a high-quality product,” admitted Charles Pun, Ford’s vice president of automotive engineering. “But we realized that to improve some of our automation, machine learning, and artificial intelligence tools, we need to train them with the help of our most experienced specialists.”

Last year, the Commonwealth Bank of Australia laid off more than 40 call center employees and replaced them with a voice-based AI bot. However, the system could not handle the workload—the volume of customer support inquiries increased. The bank had to reinstate the eliminated positions. It acknowledged that it “did not take all relevant circumstances into account” when making the layoffs.

Similarly, IBM decided to replace the functions of its human resources department with artificial intelligence. The system successfully processed about 94% of standard requests, but was unable to handle the remaining 6%—specifically, ethical issues. In March, IBM announced plans to triple its hiring of entry-level employees in the U.S. across all business units this year. “If we don’t continue to invest in entry-level hiring, what will happen in three to five years? The talent pool will simply dry up,” said IBM Chief People Officer Nickle LaMoro at the Charter AI Summit in February.

These cases show that downsizing while expanding the use of AI won’t always be the best way to grow a business, according to CNBC. According to the HR management platform Orgvue, 39% of executives laid off employees due to the implementation of AI, but 55% of them admit that the layoff decisions were a mistake. According to the staffing firm Robert Half, 32% of U.S. hiring managers eliminated positions due to AI, but were then forced to hire employees for the same or similar roles.

Executives at major tech companies continue to discuss the impact of AI on employment. Earlier this year, Anthropic CEO Dario Amodei stated outright that up to 50% of all entry-level office positions would disappear due to AI over the next five years. In May, OpenAI CEO Sam Altman, in turn, stated that he does not expect an “apocalypse in the labor market.” According to him, the impact of AI on entry-level workers has actually been less than he had predicted.

Meta CEO Mark Zuckerberg also recently stated that he does not consider mass layoffs due to AI to be inevitable. He noted that companies are constantly looking for ways to improve efficiency—and employees need to increase their productivity faster than the pace of automation.

This article was AI-translated and verified by a human editor