90% of executives say AI hasn’t boosted productivity. Some are still cutting jobs

Summary

A study found that 90% of executives believe AI has not yet improved productivity at their companies. Research suggests that AI-driven layoffs and job insecurity are reducing employee morale, which in turn lowers productivity. Employees express negative sentiment toward AI, especially when they fear job loss. While some companies see short-term financial gains from layoffs, the long-term impact on productivity is negative. The study highlights the need for companies to manage employee sentiment to fully benefit from AI investments.

Our Reading

The numbers tell one story.

CEOs admit AI hasn’t boosted productivity yet.

90% of executives say AI isn’t helping.

Layoffs are tied to AI adoption, not gains.

Employee fear undermines AI’s potential.

Author: Evan Null

When Layoffs Are the Strategy

U.S. companies have poured billions into AI, hoping to boost productivity. But research shows that AI investment often comes with job cuts. The pattern suggests that reducing staff is part of the AI strategy. Managers seek short-term profits and use layoffs to cut costs after investing in AI. Some companies even lay off workers before investing in AI to free up capital. The stock market often reacts neutrally or negatively to these moves.

Why Employee Sentiment Matters

Employees are skeptical of AI, fearing job loss. Their negative sentiment is linked to lower productivity. Reviews on Glassdoor show more criticism of AI than overall sentiment. Employees worry about training, leadership, and job security. Layoffs due to AI cause a sharp drop in employee morale. Management, however, remains optimistic about AI, despite no clear link to productivity.

A Guide for Managers

Using AI to justify layoffs is a mistake. Employees are asked to adopt AI but fear it will replace them. This creates resistance and lowers efficiency. Companies need to invest in skills and opportunities, not just cut jobs. A positive AI environment can unlock real benefits. Those that manage fear and build trust are more likely to succeed with AI.

The Hidden Costs of AI Hype

AI adoption is often tied to job cuts, which hurt productivity. Employees who feel insecure are less likely to embrace AI. This creates a cycle where fear undermines efficiency. Companies that ignore employee sentiment risk poor returns on AI investments. The market’s mixed reaction to layoffs shows that the strategy is not working as intended.