Companies begin rehiring workers laid off due to AI

Ulviyya Poladova

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Companies are experiencing an "AI boomerang" effect, as employers seek to rehire workers they previously laid off in an effort to replace human employees with artificial intelligence, the Associated Press (AP) reports.

Some businesses have found that AI models, applications and agents do not perform as effectively as expected, prompting them to bring back former employees to fill positions that had been eliminated.

Some of those returning to the workplace are now seeking higher salaries, arguing that their responsibilities have expanded to include checking AI-generated responses and correcting the technology’s mistakes.

"When it comes to critical thinking, collaboration, creativity and organisational knowledge, these are things AI simply cannot replicate. And I think that’s where companies are starting to realise: ‘Wow, we really do need people to do this work,’" said Bill Driscoll, a senior executive at Robert Half.

One example cited by AP is Swedish payment service Klarna, which resumed hiring customer service staff in 2025 after initially relying heavily on AI to reduce costs.

In an interview with Bloomberg, Klarna CEO Sebastian Siemiatkowski acknowledged that the company had gone too far in its reliance on AI chatbots.