"Boomerang" hires suggest AI layoffs aren't sticking
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Layoffs may be rising, but people are also getting rehired more often as part of a "layoff boomerang" trend, an analysis by workplace platform Visier finds.
Why it matters: AI may not be the headcount reducer that it's cracked up to be, at least not yet.
What they're saying: "The idea that now AI is coming and replacing absolutely every job is still really not proven," says Andrea Derler, a principal at Visier, adding that AI can be a "very convenient explanation for layoffs."
- Rehiring rates are increasing even amid the rollout of AI-powered agents and digital workers.
By the numbers: Visier examined data covering 2.4 million employees at 142 companies around the world. In an analysis shared exclusively with Axios, it found about 5.3% of laid-off employees end up being rehired by their former employer.
- While that rate has been relatively stable since 2018, it has ticked up, Derler says. It's hard to tell what is driving the recent uptick, since the data is backward looking, she notes.
- Still, rehiring indicates a "larger planning problem" for executives.
Between the lines: "Many very senior executives haven't had time" to dig into what can be done by AI, Derler says, "and how much that's going to cost versus how many tasks and jobs cannot be replaced."
- CEOs should think through which roles can truly be replaced by AI, the costs of installing AI infrastructure to displace those workers, then weigh the benefits and risks of letting "people and their skills" go in favor of AI infrastructure, she says.
Zoom out: This mirrors takeaways from a recent MIT study that indicated 95% of organizations are finding no return on their AI investment.
- When it comes to AI investment, "maybe all this money is not actually being spent all that wisely," Steve Sosnick, chief strategist at Interactive Brokers, tells Axios.
Zoom in: "Layoffs are never free," Derler says, and companies should consider the costs.
- For every $1 a firm saves from layoffs, it spends $1.27 when accounting for often overlooked costs like unemployment insurance, severance packages and more, according to data from software platform Orgvue.
Reality check: Derler concedes that these are "really complex" problems that executives need to figure out quickly.
The bottom line: As news of headcount reductions rattle workers and please some investors, this data indicates an offer to come back to the office may be more likely as companies struggle with AI adoption.
