Layoffs have become the easy AI lever.
Under growing board pressure to show that their AI investment is paying off, executives are turning to the most immediate return they can find: they’re cutting jobs, banking the savings and labelling it “AI transformation”.
WRITER’s latest AI Adoption in the Enterprise report, which surveyed 2,400 executives and employees globally, tells us just how little strategy sits behind those decisions. The data shows that 69 percent of companies are already planning layoffs tied to AI, yet 39 percent of executives admit they have no formal plan to drive revenue from it, and three-quarters describe their own AI strategy as “more for show” than a real guide to decisions.
This is innovation theatre at its most dangerous. Layoffs might give leaders a temporary bump in earnings they can sell to the board, but they don’t indicate where AI will create long-term revenue, how a company will operate differently, or what an organisation is now capable of with this new leverage.
Through our work deploying AI across hundreds of enterprises, we’ve seen that the strongest strategies share three things: a clear strategy for where AI will create value, a willingness to redesign the work around it, and a credible path for employees to participate in the agentic era.
Cuts before the value is clear
Part of what makes layoffs so tempting is that AI’s impact is much easier to see at the individual level. AI super-users are saving close to nine hours a week, are at least 5x more productive, and are 3x more likely to get a raise or promotion. It’s easy to look at those efficiency gains and conclude that today’s workload can be absorbed by fewer people.
But one employee moving faster doesn’t mean the business moves faster. Someone might now complete a task in half the time, but their work still sits in the same approval queue, passes through the same unnecessary handoffs, and gets stuck in the same bottlenecks. The organisation moves the same way it always has, or even worse, slows down as it’s flummoxed by the new velocity and output showing up among only certain individuals or teams
Creating real leverage with AI takes much harder work. You have to look at how work moves across the organisation, where it gets stuck, which roles and tasks should change, and where AI could create entirely new capacity. Headcount reduction lets leaders skip those tough questions while still giving a viable story to their boards and investors. And the longer-term cost of that shortcut is already showing up. Despite 97 percent of executives saying they deployed AI agents in the past year, only 23 percent report significant ROI from generative AI.
Layoffs also make the redesign you’ll inevitably need even harder. You’re asking employees to help rethink how work gets done while they’re simultaneously wondering whether that work — or their entire role — is about to disappear. Instead of creating the conditions for people to experiment, adapt, and redesign their jobs around AI, you’re making them less willing to participate at all. Our report found that 29 percent of employees admit to actively working against their company’s AI strategy. That rises to 44 percent among Gen Z, with anxiety about job loss as the main driver.
Redesign the work and the workforce
Closing the ROI gap won’t come from reducing headcount. From what we’ve seen, a long-term, value-creating AI strategy starts with three things:
- First, close the strategy gap before touching headcount. With 39 percent of executives lacking a formal plan to drive AI revenue, cutting staff first removes capacity without addressing the underlying problem. Start with a clear strategy for where AI can create new value and how your organisation will capture it.
- Next, redesign the work itself. That means dismantling processes built around human constraints and rebuilding workflows around what people and AI can now do together. Question the roles, handoffs, and processes that made sense when humans had to do everything themselves. Then design new ways of working around the combined strengths of people and AI.
- Finally, give people a path into that new model of work. 60 percent of leaders planning layoffs for non-adopters are, in effect, asking employees to reskill under threat. Explicit leadership support, training, protected time to experiment and opportunities to share what works give employees a way to participate in the redesign, with layoffs only as a last step.
The biggest opportunity in front of the enterprise isn’t to do the same work with fewer people. It’s to rethink what work even is and in turn, generate far more business value– and most leaders haven’t let themselves imagine that yet. The leaders who do will open up entirely new categories, curate customer experiences that weren’t possible before, identify new ways of reaching and growing their market, and create revenue sources that don’t exist yet.
Jevan Soo Lenox
Jevan Soo Lenox is chief people officer at WRITER. He previously held chief people officer roles at insitro and Stitch Fix, both companies using AI to transform human work and industry practices in drug discovery and e-commerce respectively. He has also held leadership roles at Square, Blue Bottle Coffee and Minted.
Jevan began his career as a management consultant at McKinsey & Company at their Boston, New York, and Shanghai offices, serving clients across the technology, healthcare, and education sectors on strategy, human capital and organisational effectiveness as well as leading McKinsey’s Asia-Pacific recruiting strategy across 12 countries.
- Jevan Soo Lenox
