Over half of UK businesses who replaced workers with AI regret their decision

• 55% of the businesses that made AI-induced redundancies regret it
• 38% of leaders still don't understand AI's impact on their business
• Humans are essential, but AI investments continue to rise

According to organizational planning platform Orgvue, two in five (39%) UK businesses made redundancies due to their AI adoption and hopes for the technology, however more than half (55%) of them are now admitted those redundancy decisions were wrong.

Consequences of the AI-induced redundancies include widespread internal confusion, leading to employees quitting and a drop in productivity – the exact opposite of what businesses had initially hoped for with the deployment of artificial intelligence.

Having seen how it's played out, businesses are now less likely to believe that AI will replace human workers after all.

Business leaders regret prioritizing AI over human workers

The report uncovers huge amounts of uncertainty over AI's impacts on the workforce. Two in five (38%) leaders still don't understand AI's impact on the businesses, with 25% unsure which roles are most at risk from AI.

Despite only 48% of managers expecting AI will replace some workers compared with 54% last year, leaders reportedly feel less responsible in protecting their workforce from redundancies.

"While 2024 was the year of investment and optimism, businesses are learning the hard way that replacing people with AI without fully understanding the impact on their workforce can go badly wrong," Orgvue CEO Oliver Shaw noted.

"We’re facing the worst global skills shortage in a generation and dismissing employees without a clear plan for workforce transformation is reckless."

Looking ahead, nearly half (47%) fear uncontrolled AI usage by employees, with four in five planning to retrain employees to use the tools properly. Two in five (41%) have already increased their learning and development budgets accordingly, with half (51%) introducing internal AI usage policies and 43% working with third-party AI specialists.

Although it's apparent that human workers are fundamental to businesses, 80% plan to increase AI investments in 2025, yet 27% still lack a clear roadmap.

Overall, Orgvue's research paints a troubling picture of the state of AI, highlighting a total lack of understanding. "While it’s encouraging to see investment in AI continue to grow, businesses need a better understanding of how the technology will change their workforce in the coming months and years," Shaw concluded.

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