By John A. Tures, Professor of Political Science, LaGrange College

Companies can’t wait to rush out and incorporate artificial intelligence into their companies. Egged on by some in the media, and perhaps the companies that produce such AI, they’ve also taken to purging their workforce. But a strange thing is happening. Companies that kicked humans to the curb are starting to hire people back. They’ve realized that our output may not have the hype of artificial intelligence, but human work still remains superior.

At the beginning of November, Federal Reserve Chair Jerome Powell got a ton of attention for his comments extolling the power of artificial intelligence. As noted in a Yahoo article “He [Powell] connected that slowdown, at least in part, to what CEOs are now openly telling investors: AI allows them to do more with fewer people. He noted ‘a significant number of companies’ have recently announced layoffs or hiring pauses, with many of them explicitly citing AI as the reason.’”

“‘Much of the time they’re talking about AI and what it can do,’ Powell told reporters after the Fed’s rate-cut decision, warning large employers are signaling they won’t need to add headcount for years. ‘We’re watching that very carefully,’ he added, in that Yahoo article.

I’m beginning to see some of President Trump’s criticisms of Powell for being too reactive.

Those more proactive are beginning to see that “Companies Face AI Buyers’ Remorse” according to this Global Finance Magazine article. Corporations bought into the hype, and are now facing the reality, the limits of AI, and the power of humans that businesses seem to have taken for granted.

“Financial technology company Klarna also laid off 700 customer-service experts, hoping AI tools would do the job. Nevertheless, a few years later, Klarna CEO Sebastian Siemiatkowski admitted that AI agents without human support were not the “right fit” for his company. Empathy, smiles, innovation, and critical thinking — brought by real employees — are still needed. Klarna had to rehire humans. And it is not the only group rediscovering the virtues of human touch,” according to Global Finance Magazine.

It was the same for IBM, which cut 8,000 jobs for A.I. and was held up as the poster child for the prowess of artificial intelligence, only to rehire just as many humans out of necessity. “IBM began hiring again—in large numbers. Only this time, the roles weren’t in admin or back-office functions, but in software engineering, sales, and marketing—areas where human creativity and complex decision-making remain critical.” Going all in on A.I. “…introduced delays in problem resolution, ethical dilemmas, and low morale that pushed the company to fatten other branches of the group, such as engineering, strategy, or client engagement, to humanize Big Blue.”

Moreover, Global Finance Magazine reported a new survey of over 1,000 business executives from the U.S., U.K., and other countries in Europe and Asia. They noted that almost 40% thought AI would make people obsolete. “Nevertheless, 55% of these same leaders regretted laying off people. “Businesses are learning the hard way that replacing people with AI without fully understanding the impact on their workforce can go badly wrong,” notes Oliver Shaw, CEO of Orgvue.” McDonald’s was another company that learned the hard way that customer service and human resources were better staffed by humans, after a variety of hilarious repeated errors.

I’m sure there are still some companies that feel that unless they lay off their hard-working humans in favor of AI, they’ll fall behind. But it’s those businesses that recognize the value of human capital and opt to utilize it well that will be the ones ahead in the game.

John A. Tures is a professor of political science at LaGrange College in LaGrange, Georgia. His views are his own. He can be reached at jtures@lagrange.edu or on “X” at @johntures2. His first book “Branded” will be coming out this Fall, published by Huntsville Independent Press (https://www.huntsvilleindependent.com/).