'We Acted Too Quickly': Over Half of Companies Regret AI-Driven Layoffs, Report Finds
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‘We Acted Too Quickly’: Over Half of Companies Regret AI-Driven Layoffs, Report Finds

‘We Acted Too Quickly’: Over Half of Companies Regret AI-Driven Layoffs, Report Finds

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Automating jobs isn’t the panacea for all companies, and 55% admit they have made a mistake, a new survey finds.

Written By
Esther Shein
Esther Shein
May 19, 2025

Many business leaders who downsized their workforce in response to AI adoption now believe they acted too quickly.

A new report from Orgvue reveals that, while 39% of companies laid off staff due to automation, 55% of those now regret the decision. Confidence in AI’s ability to replace human workers also appears to be waning, with only 48% of leaders expecting job displacement, down from 54% last year.

More findings from the Orgvue report

  • 62% of executives say they feel responsible for shielding employees from AI-driven redundancies, a notable drop from 70% last year.
  • 34% of the leaders reported that employees have voluntarily left their jobs as a direct result of AI’s implementation.
  • One of business leaders’ biggest fears is that employees are using AI without proper controls (47%). This is motivating 80% of business leaders to reskill employees to use AI effectively.
  • 51% said they are introducing internal policies so that employees will understand how AI should be used in the workplace. And 51% of leaders believe reskilling is strategically important in preparing their workforce for AI.
  • To ensure employees have the right training, 41% said they have increased their L&D budgets.

A startup case in point: Klarna’s AI reversal

The findings in Orgvue’s report reflect a broader shift happening across industries. One prominent example is financial technology company Klarna. Beginning in 2022, Klarna replaced about 700 customer service employees with AI tools as part of a push to automate both marketing and support operations. The move was driven largely by the need to cut costs.

However, the company has since admitted that this automation-first approach didn’t deliver the customer experience it had hoped. “From a brand perspective, a company perspective, I just think it’s so critical that you are clear to your customer that there will always be a human if you want,” the Swedish fintech’s CEO Sebastian Siemiatkowski told Bloomberg.

Siemiatkowski said the use of AI agents without human support is no longer the right fit for Klarna.
Esther Shein

Esther Shein is a freelance writer and editor who specializes in covering AI, cloud computing, cybersecurity, data, software, and IT leadership. She has extensive experience writing for technology, business, and executive audiences, with a focus on making complex enterprise technology topics clear, timely, and useful for decision-makers. Her work has appeared in publications including TechRepublic, eWeek, CIO.com, CSOOnline, ZDNet, TechTarget, Communications of the ACM, Consumer Goods Technology, Computerworld, and The Boston Globe. In addition to journalism, Esther has written thought leadership whitepapers, ebooks, case studies, and marketing materials for organizations across the technology sector. Her work often explores how emerging technologies, security trends, data strategies, and leadership priorities shape business transformation and IT decision-making. Through her reporting and editorial work, Esther brings a practical, business-focused lens to technical subjects, helping readers understand not only what is changing in technology but why it matters.