Companies are cutting back on staff, but Bet on AI profits –actual or expected. Atlassian cut 10% of its workforce, or about 1,600 employees, to fund increased investment in AI development, while Block cut about 4,000 of its 10,000 employees, a move tied to AI’s potential for fintechs to automate operations.
This kind of layoff is when the company Leadership acts on expectations. AI will automate thousands of jobs. As more companies pursue headcount reductions to increase efficiency and find themselves reaping the benefits from investors, the message becomes clear: AI is not positioned solely to augment human work.
AI-washing (using AI as a convenient explanation for decisions such as layoffs) may be giving companies cover by using talk about AI to hide the need to cut costs or overhire early. However, the idea that AI has already replaced jobs is inconsistent. report The productivity gains from AI have not been overwhelming so far.
Low quality or inaccurate AI-generated content – Dubbing AI’s “work delay”” — That may be part of the reason why productivity gains have been slow. Such content may seem useful, but upon closer inspection, it often requires even more work to review, fix, and clean up.”
Managing digital disruption
Despite the disruption AI creates, CIOs have the opportunity to: demonstrate leadershipSumit Johar, CIO of financial software company BlackLine, emphasized that “CIOs are in the best position to drive change within their organizations. However, managing AI disruption requires strategic planning that takes into account AI’s capabilities and limitations.”
For example, are companies’ AI capabilities sophisticated enough to make entire roles redundant, or are the proposed cuts aimed at freeing up funds for AI investments that could take over the jobs of those who are being made redundant?
“Everyone believes that AI has the potential to dramatically increase worker productivity, and when combined with automation, it could offset layoffs, Dzhokhar says. But the question seems to be how quickly that will happen.”
For now, we remain skeptical about the speed with which companies can hand over entire processes to independent AI systems.
“At least… within the range of companies and CIOs I’m talking to, people are becoming very cautious about handing over the keys to any business process to AI to achieve end-to-end autonomy,” he said.
Some job cuts may contribute to company profits But premature and excessive cuts could come back to haunt CIOs, warned Sherry Seewald, CIO of automation software company Tungsten Automation.
“There are certainly companies that are rehiring people who were let go because they weren’t getting the results they expected,” she says.
work slop problem
On the other hand, delays in AI work can undermine your team’s work instead of making it more efficient. “That’s definitely something that happens to every company sooner or later,” Seewald said.
CIOs must learn how to recognize slop and understand what it means for their team and company outcomes.
AI tools are designed to provide answers to users, even if those answers are unhelpful or wrong. Without enough upfront training, monitoring, and governance, you increase the risk of creating redundancies and creating more work for your employees.
“The more you know about your subject, the easier it is to spot problems,” says Seewald. While a well-trained eye might think so, CIOs need a formal process to measure the actual value of AI.
Dzhokhar also emphasized the importance of formal processes: “How do you evaluate yourself? How do you compare yourself to others?” Any organization that wants to leverage AI needs to ask these questions, he said, but it requires rigorous evaluation and benchmarking.
At Blackline, we collect employee feedback through surveys across various departments to gather information beyond engagement. “Every quarter, we ask our employees: How is it helping you? Where is it helping you? Are you facing any other challenges? Is it really increasing your productivity? How much time is it saving you?” Dzhokhar shared.
take care of employee morale
In the not too distant future, CIOs may manage more AI agents than human employees. However, there is a workforce today that still needs leadership.
“You can’t create a culture of change within your company if you create a situation where employees have to constantly fear, ‘Next time, I’m actually going to lose my job,'” Dzhokhar says. “People shouldn’t be afraid of change.”
He argued that CIOs need to view AI adoption as more than just a technology change. “That’s no way to win this battle for change,” he said. “It needs to be a transformation that focuses on culture and people.”
And people are getting burned out. “I think the biggest concern I have is AI burnout, and I think a lot of people are starting to realize that,” Seewald says.
This burnout can further reduce productivity, so CIOs should consider how to balance the use of AI with employee capabilities.
Manage your talent pipeline
The speed and volume of demand for AI is making it difficult for CIOs to plan for the long term. However, focusing too much on the here and now can lead to myopia. Seewald has heard a lot of excitement about AI agents and the need to reduce human resources.
“When I talk to my colleagues, I’m like, ‘Oh, we just need a senior-level role where we can monitor our agents,'” she said. “But the question is when will those seniors retire?” There may be a shortage of experienced supervisors.
Companies’ AI efforts will be undermined by less investment in developing new talent to support the future of AI.
“We may actually be persistent [the very problem] We are trying to solve with AI the lack of access to the next pipeline of resources to help advance technology,” Seewald said.
