Leadership1 publisher3 min readPublished
Gartner expects a third of AI-replaced workers to be rehired by 2029 at higher cost
Gartner's Tori Paulman says agentic AI is not carrying enough work to justify large cuts, and her team traced under 1% of more than a million 2025 layoffs to AI productivity. The rehiring bill lands on few employers.
The Board Room · Leadership desk
What happened
- Gartner forecasts that by 2029, 30% of employees laid off because AI replaced them will have to be rehired, likely at significantly higher cost.
- Gartner VP analyst Tori Paulman said agentic AI is not taking over enough work for an organisation of any size to succeed with laying off a considerable number of workers.
- Her team reviewed more than 1 million layoffs in 2025 and found that cuts tied to AI making one worker more productive accounted for less than 1% of the total.
- AI-related firings decreased in the second half of 2025, according to Paulman.
- Klarna replaced 700 customer service agents with AI workers in 2024 and had begun hiring humans back by early 2026.
Compiled by The Board RoomSomething wrong?How this is made
Why it matters
- cost Reversing a cut happens at a wage set by competition for a shrinking labour pool, so the employer pays the market's price for the function.
- constraint The under-1% finding narrows who the rehire warning applies to: a CFO cannot aim it at layoffs generally, only at the small set of cuts actually made on automation grounds.
- decision A board setting 2026 headcount now has a named Gartner analyst saying the capability is not there. That makes an AI-justified cut a decision to buy the work back later.
- contradiction Anthropic's scenario of 18% white-collar unemployment and Gartner's count of under 1% describe the same decade incompatibly, and which one a planner believes changes the headcount answer.
A rehire is priced by whatever the hiring market charges when it happens. Paulman's case is that the people leaving now will have to be bought back from a smaller pool: baby boomer retirements and falling birth rates are shrinking the global labour force, and competition for hires means it costs more to bring employees back [12].
Gartner's own count bounds how big that bill can be. One percent of a million layoffs is 10,000 workers, and 30% of those is roughly 3,000 rehires by 2029 [19]. That arithmetic holds only if the group Gartner expects to be rehired is the group it counted.
So most of last year's cuts were something else. Gartner found that 17% of AI-attributed layoffs in the first half of 2025 were commercial pivots, moving staff off unprofitable units and onto new AI product lines [6]. Paulman said those employers were likely "AI-washing", using AI as cover for standard business restructuring [7]. "Our interest was piqued when we began to see all these headlines about layoffs, but we perceived at the time that they seemed to be coming from high-tech companies that also were selling AI products," she said [8].
The walkbacks are already dated and on the record. CNBC reported that Ford, IBM and the Commonwealth Bank of Australia reemployed engineers, human resources reps and customer service staff after AI-related cuts [10]. "Customers just don't really like talking with AI, particularly over voice," Paulman said [11].
The gap Gartner describes is a knowledge gap. Paulman said many of the business leaders it works with lack a basic understanding of AI fundamentals while under pressure to find cost savings and revenue growth using AI [14]. "Executives are being steeped in an environment of what I would call magical thinking: that AI will just figure it out," she said [13]. Fewer than half of organisations said AI is essential to their core work, in a study of more than 1,500 decision-makers by the software company Aptean [15].
The two forecasts on the table point in opposite directions. Anthropic has described scenarios in which AI boosts the US economy 15% by 2030 while unemployment among many white-collar workers hits 18% [16]; Gartner is counting AI productivity behind under 1% of the layoffs it reviewed for 2025 [4]. The board-deck version is that AI cuts are premature and get reversed at a premium, and the deck is incomplete: Gartner did not publish the premium it expects returning workers to command. Gallup found that workers who use AI frequently are more than twice as likely to fear job elimination within five years as those who use it a few times a month or year [17].
What to watch
- Whether Gartner publishes the size of the population it expects to be rehired, and the wage premium it attaches to it.
- Whether the second-half 2025 decline in AI-attributed firings continues through 2026 announcements.
- Whether any company that has reversed an AI layoff discloses the cost difference between the cut and the rehire.