'Workforce reductions may create budget room, but they do not create return': Gartner warns companies relying on layoffs to free up room for AI may be caught out in the long run

Date:
Thu, 07 May 2026 10:23:19 +0000

Description:
Companies are investing in agentic AI and laying off human workers, but Gartner says this is the wrong way to go about it.

FULL STORY ======================================================================Copy link Facebook X Whatsapp Reddit Pinterest Flipboard Threads Email Share this article 0 Join the conversation Follow us Add us as a preferred source on Google Newsletter Subscribe to our newsletter High ROI companies are laying off at the same rate as low ROI companies The best returns come from
investing in human skills and jobs Net job creation could happen as soon as 2020-2029 Four in every five organizations that have piloted or deployed autonomous AI agents have also reported workforce reductions, new Gartner research has claimed - however the research giant fails to link layoffs and business autonomy to meaningful ROI improvements.

According to Gartner, companies high higher ROI from autonomous AI reduced staff at roughly the same rate as companies with poor or negative returns, implying that agentic AI isn't a key job cut driver, but rather other factors are at play. As a result, analysts argue cutting jobs may free up budget, but it does not create business value in itself. You may like Cutting costs with AI misses the point Freshworks and Coinbase announces major layoffs - AI blamed Sam Altman says some companies are AI washing by blaming unrelated layoffs on the technology but admits things may get worse soon Latest Videos From AI and job cuts aren't that closely linked after all In fact, from the analysis, it's clear that companies investing in the human workforce are seeing the best returns, including those spending on employee skills, new operational roles, human oversight and governance.

For Gartner, an optimal agentic, autonomous company is "human-amplified" rather than "humanless."

"Organisations that improve ROI are not those that eliminate the need for people, but those that amplify them by aggressively investing more in skills, roles and operating models that allow humans to guide and scale autonomous systems," Distinguished VP Analyst Helen Poitevin explained.

Looking ahead, forecasted AI agent spend is on the rise, projected to hit $206.5 billion in 2026 up from $86.4 billion in the year prior, before
surging to $376.3 billion in 2027. Are you a pro? Subscribe to our newsletter Sign up to the TechRadar Pro newsletter to get all the top news, opinion, features and guidance your business needs to succeed! Contact me with news
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But even with strong investment in autonomous tech and continued layoffs, Gartner is still projecting net job creation by 2028-2029.

"Long term, autonomous business will create more work for humans, not less," Poitevin concluded. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.



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Link to news story: https://www.techradar.com/pro/workforce-reductions-may-create-budget-room-but- they-do-not-create-return-gartner-warns-companies-relying-on-layoffs-to-free-u p-room-for-ai-may-be-caught-out-in-the-long-run


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