AI boomerang: What one should keep in mind if Microsoft, Barclays Bank, Kroger rehire sacked employees?

Job cuts of the AI era, which are affecting tens of thousands of people, occasionally have an epilogue. Some companies, after discovering that AI models, applications and agents don't perform as well as expected, end up rehiring laid-off workers to fill eliminated positions. How common such reversals are is hard to know, but they are happening often enough to acquire trend status and a nickname: the “AI boomerang."

Companies around the world are increasingly citing artificial intelligence when slashing jobs, fueling anxiety that a lot more workers may lose their livelihoods to machines. Microsoft, Barclays Bank and supermarket chain Kroger are among the latest entries on a growing list of companies that have announced AI-related workforce reductions this year, including the elimination of jobs deemed redundant and positions shed to free up money for developing and deploying the technology.

Hiring managers in industries such as finance, marketing, legal and healthcare told staffing and placement firm Robert Half they had hired people to do the same or similar work of jobs scrapped during AI-linked cutbacks because the roles required human oversight and skills such as relationship management or quality control.



Klarna, the Swedish provider of buy now, pay later services, began recruiting human customer service representatives again last year. CEO Sebastian Siemiatkowski acknowledged in an interview with Bloomberg News that the company’s reliance on an AI chatbot to cut costs had gone too far.

In June, Ford said it had hired or promoted 350 veteran engineers after AI tools the automaker deployed to do quality control work did not perform at the expected level.

“AI utilization has been an important part of our quality gains and that — along with deep technical expertise of our teams — is a powerful combination,” a Ford spokesperson told The Associated Press.

AI vs Humans

However, companies don’t always broadcast their U-turns on shifting resources or responsibilities from employees to AI systems, said Lucy Beaumont, a global senior vice president at SHL, a U.K.-based technology company that develops employment-related tests and tools.

Management experts shared insights on navigating the ebb and flow as employers seek productivity gains from AI or cost savings from reduced staffing, and occasionally reconsider their approaches.


When companies use AI to perform tasks previously done by people, they often miss the invisible work employees do beyond their formal job descriptions, said Betsy Summers, a principal analyst on the Future of Work team at market research and advisory firm Forrester.

That might include sensing emotions and moods, holding impromptu meetings and putting in extra effort when feeling inspired or otherwise motivated, Summers said. Another factor that complicates assigning more work to AI-powered tools is that company procedures for tasks such as data processing and bookkeeping are not always well documented, experts said.