If you’re laying off staff, you’ve missed the point of AI

Alexandra Ebert at MOSTLY AI argues that businesses are missing the point of AI: its value isn’t its ability to make efficiencies so that jobs and costs can be cut; it’s to free up employees’ time for revenue-generating tasks

 

The state of work in 2025 has been marked by a powerful shift. As AI automates and speeds up routine tasks, it’s enabling fewer people to do the same amount of work. Companies are taking that as a green light to slash headcounts, with multinationals like Microsoft (BBC) and Google (Fast Company) laying off huge chunks of their global workforce in pursuit of a leaner, less human-centric workforce.

 

Businesses are viewing AI as an easy way to reduce headcount while still achieving the same results. It’s being paraded as visionary leadership – a glimpse into the future.

 

But this isn’t the case. The fact is, the businesses laying off staff for AI have fundamentally misunderstood what AI’s biggest value is. AI shouldn’t be about doing the same work with fewer people. It should be about freeing up human capacity to focus on higher-value, higher-impact work that will drive new, additional value.

 

Instead of cutting headcount when AI enters the picture, businesses should keep staff on board and use the capacity unlocked by automation to their advantage. With time freed up, every employee has the potential to become an innovator: testing new ideas, improving processes, and driving breakthrough thinking. But that won’t happen by default. To make the most of this opportunity, businesses must actively lead a cultural shift — one that encourages experimentation and rapid prototyping, while openly removing the fear of failure.

 

AI might offer significant productivity gains; but treating it as an alternative to a diverse, human workforce is a shockingly narrow view. The economist Carl Benedikt Fray put it best: had the Industrial Revolution focused solely on using technology for its efficiency gains, rather than driving broader breakthroughs, it would have produced nothing but more low-cost products.

 

Everyone enjoys a cheap product now and then, but that’s not what creates new discoveries. As Fray argues, if the Industrial Revolution only went about perfecting the fastest loom, we’d have cheap cloth – but no antibiotics or jet engines.

 

Competing on cost is a losing game – there will always be someone out there who can do it cheaper or make it quicker. The businesses that thrive in the long term are those that compete on the value and quality of a product, rather than price. And that value comes from innovation.

 

But here is where the issue lies. In laying off staff, businesses are letting their potential innovators – their people – go, in place of a tool, which of its own accord, cannot innovate.

 

AI is an automator, not an innovator. It’s trained on heaps of pre-existing data and, by design, does not produce original ideas. Any new product or service it suggests will be a product of someone else’s work. Yes, AI can be a sparing partner for innovation, but creativity and innovation are uniquely human talents, so when companies reduce headcounts, they’re stripping themselves of the very thing that will drive their long-term business success.

 

So, what’s the solution?

 

First, businesses need to stop focusing on reducing their workforce and instead utilise AI to eliminate the busywork that makes up so much of an employee’s day. From drafting internal emails to searching for information, it’s estimated that staff spend more than half of their time on these low-value, time-consuming tasks. That’s time that could be spent doing the high-value work that humans do best, whether that’s developing a new customer engagement strategy or creating prototypes for a new product.

 

Businesses shouldn’t see AI as an opportunity to reduce headcount, but instead see it as a chance to reinvest the reclaimed time. The capacity unlocked by AI should be ploughed back into product development and experimentation. This is where growth lies; this is where sustainable, long-term business value is generated.

 

However, business leaders can’t just assume that, now that their staff have an extra two hours in the day, they’ll automatically spend it on innovation initiatives. So a second, crucial step executives must take is to actively build a culture of innovation – one that facilitates and celebrates experimentation, learning, and failure. Staff need to feel able to try new ideas or ways of working, without fear of repercussions.

 

And alongside this innovation-first culture, businesses must invest in enabling employees to work effectively with AI by providing them with adequate training and reskilling opportunities.

 

Staff should be empowered to use AI as a creative accelerator. Innovation will still be human-led, but AI can support the process – acting as a research tool, brainstorming partner, or prototyping engine. Crucially, it breaks down barriers, enabling anyone to experiment and contribute ideas, regardless of their background, experience, or qualifications. With AI, the pace of innovation can increase — if we don’t lose the human creativity that drives it.

 

There’s also a point to be made about running with AI before we can walk. We’re still in the early days of AI. Businesses risk overestimating what it can do today and cutting skilled staff, just to realize that they actually need them. Cutting skilled staff to chase short-term savings might seem efficient, but the long-term cost of rehiring lost talent could be far greater.

 

AI stands to bring immense value to firms, but it is not a replacement for humans and shouldn’t be treated as such. Where AI really shines is as a tool, with its ability to transform the working day, taking tedious busywork off of staff’s desks whilst supporting and uplifting human excellence in the process. The winning businesses will be those that keep AI close — but humans closer.

 

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Alexandra Ebert is Chief AI and Data Democratization Officer at MOSTLY AI

 

Main image courtesy of iStockPhoto.com and AndreyPopov