Gartner: AI layoffs do not improve returns on investment

A Gartner survey found AI-related workforce cuts are not delivering better returns on investment. The findings are based on responses from 350 business executives at large organisations using autonomous technologies.

About 80% of organisations piloting or deploying autonomous business tools reported workforce reductions. Yet job-cut rates were almost the same among respondents reporting stronger returns and those seeing only modest gains or negative outcomes.

The survey covered global business executives at organisations with annual revenue of at least USD $1 billion, or the equivalent. Their companies had either piloted or deployed at least one technology in areas including AI agents, intelligent automation and other autonomous systems.

The figures suggest a gap between AI-linked cost-cutting and the financial results companies expect. Organisations with better returns were more likely to invest in the skills, roles and operating models needed to manage and expand autonomous systems.

That view comes as spending on AI agent software rises sharply. Gartner forecasts the market will reach USD $206.5 billion in 2026 and USD $376.3 billion in 2027, up from USD $86.4 billion in 2025.

Return debate

The research challenges a common boardroom assumption that reducing headcount after AI deployment will quickly improve the economics of technology investment. The findings suggest those cuts may free up budget, but do not by themselves improve returns.

Helen Poitevin, Distinguished VP Analyst at Gartner, said the problem lies in treating layoffs as the main route to AI value.

"Many CEOs turn to layoffs to demonstrate quick AI returns; however, this disposition is misplaced," Poitevin said. "Workforce reductions may create budget room, but they do not create return. Organisations that improve ROI are not those that eliminate the need for people, but those that amplify them by aggressively investing more in skills, roles and operating models that allow humans to guide and scale autonomous systems."

Gartner uses the term autonomous business to describe organisations that move beyond basic automation to models in which machines and employees both operate with greater independence. That does not mean a human-free organisation, but one in which workers play a more active role in oversight, governance and scaling.

Jobs outlook

The study's longer-term employment outlook runs against fears that growing use of AI agents will inevitably shrink the workforce. Gartner predicts autonomous business will become a net creator of jobs by 2028 to 2029.

It expects that shift to be driven by new kinds of work AI cannot absorb, alongside structural pressures including demographic decline and the need for human judgement in trust-dependent moments.

"Long term, autonomous business will create more work for humans, not less. Lasting structural factors such as demographic decline and high-stakes, trust-dependent consumer moments will ensure human talent remains central to running, governing and scaling autonomous business," Poitevin said.

The findings come as companies across sectors test how far AI agents and related automation can take over tasks once handled by staff. The survey suggests that while many businesses are already trimming headcount during that transition, the commercial case remains weak when measured by return on investment.

For executives weighing AI spending against labour costs, the data indicates that more durable gains may come from redesigning work around people and machines rather than using the technology mainly to reduce staff.

Gartner's sample covered enterprises already engaged with AI agents, intelligent automation and other autonomous technologies, making the results a snapshot of early adopters rather than the broader economy. Even so, the near-equal rate of workforce reductions among high-performing and low-performing respondents suggests layoffs alone are not what separates organisations getting more value from these systems.

With AI agent software spending set to more than quadruple from 2025 to 2027, the question for companies is shifting from whether to adopt the tools to how to organise around them. Gartner's answer is that returns depend less on removing people than on reshaping roles so employees can direct, govern and extend the systems they introduce.