In the early hours of the morning, Kevin tosses and turns. He leads a mid-sized company, and he knows his competitors are starting to use AI. But he’s scared that once he goes down that road, there won’t be a place for his people. The worry follows him into the day, when a board member casually mentions that a buddy at another company increased revenue by 50% by automating all of their customer service. “But what did their people do?” Kevin wonders. He reaches out to someone who knows the team, and he’s dismayed to hear what he already suspected. They packed up their things and filed for unemployment. Not us, Kevin thinks. And yet the worry of having to shut it all down because he won’t “get with the times” keeps gnawing at him.

If this feels like you, you are not alone. You are anxiously holding two things at once: your people and your profits (and all the people, shareholders, investors, and customers who have a stake in this too). The reality of what the world is becoming can feel scary. It can feel like you have to choose one or the other. But it doesn’t have to be that way. I want to ground you in a few reasons why your trepidation makes sense, and then help you see why these two things may not be as at odds as they seem.

First, your gut is picking up on something real

Let me start with the fear itself, because I don’t think it’s silly. Kevin isn’t wrong that AI is going to change his business. That part is real, and the leaders who pretend otherwise aren’t doing their people any favors. In 2025, companies attributed around 55,000 job cuts to AI. In just the first half of 2026, that number passed 101,000, nearly double the entire year before. So the pressure you feel is not in your head. It’s the water everyone is swimming in right now.

But there’s another thing your gut is picking up on, and it’s the part that keeps Kevin from just following the crowd. Something about the “cut everyone and automate” story doesn’t quite add up. It turns out that instinct is worth trusting, because when you look at what actually happens after those cuts, the picture is a lot messier than the headline.

Forrester found that 55% of employers already regret their AI-driven cuts. When Orgvue surveyed the companies that had made people redundant because of AI, 55% of them admitted the decision was a mistake. And a lot of them are already walking it back. Two-thirds of the companies that cut people for AI have started rehiring some of the same people they let go. It’s happening enough that it has a name now. People are calling it the AI boomerang.

The part that would keep Kevin up at night if he knew it: one in three of those employers spent more on rehiring and restaffing than they saved by cutting in the first place. So his late-night question, the “but what did their people do,” turns out to be exactly the right question to be asking.

This isn’t new, we just keep forgetting it

None of this is really new, either. We seem to relearn it every time the pressure ramps up. Wayne Cascio spent decades studying what happens to companies after layoffs. One analysis he worked on followed around 43,000 companies over 37 years, and the ones that leaned hardest on cutting tended to underperform their peers in the years that followed.

My favorite study on this comes out of Harvard. Ranjay Gulati and Nitin Nohria looked at 4,700 companies across three different recessions and found that only 9% of them came out the other side stronger than they went in. The companies that made it into that 9% had something in common, and it wasn’t aggressive cutting. They kept investing in their people and their future even while they trimmed the things that genuinely needed trimming. That balance is what carried them through.

Why your people and your profits aren’t actually enemies

Here’s where I want to gently push on the idea that this has to be a choice between the two.

When a company cuts, the people who stay rarely just pick up the slack and feel grateful. Survey after survey of layoff survivors finds the same thing. Around 74% say their own productivity dropped afterward, 69% say the quality of the work got worse, and 87% say they’d no longer recommend the place to work. The strongest people, the ones with somewhere else to go, tend to leave first. And replacing any of them isn’t cheap. Depending on the role, it runs anywhere from 50 to 200% of their salary once you count recruiting, onboarding, the months before someone is fully up to speed, and all the hard-won knowledge that leaves in their head that no one ever wrote down.

And then there’s the part I most want Kevin to hear, because it flips the whole thing on its head. Cutting your people is one of the worst ways to actually succeed with AI.

A widely-shared MIT report this year found that 95% of companies had seen no meaningful return on their AI investment within six months. When researchers looked into why, it usually wasn’t the technology. The tools mostly work. What got in the way was everything human and organizational around them: the people, the processes, and the way work actually flows through a company. One rule of thumb from that world is that the technology is about 20% of the challenge, and your people and processes are the other 80%. McKinsey saw the same pattern. Most companies are simply layering AI on top of the way they already do things, and the ones actually making money from it are the ones who rethought how their people and their tools work together.

So picture Kevin’s competitor again, the one who automated customer service and sent everyone home. There’s a real chance that company is now sitting in the 95% getting very little back, because they kept the software and lost the people who understood the customers. The thing that actually creates a lasting growth story, redesigning how humans and AI work side by side, is the thing you can only do if you still have your humans.

Where this leaves you

When you put all of it together, the two things Kevin is lying awake trying to protect start to point in the same direction. His people are expensive to lose, hard to replace, and essential to making AI actually pay off. Caring about them turns out to be one of the most financially sound instincts he has, even if the current headlines make it feel like weakness.

I’ve spent my whole career circling this same idea from different angles, first as a teacher, then as a founder, and now running an accelerator. For a long time I thought the human side of the work was the soft part, the part you protected in spite of the numbers. I’ve stopped believing that. The longer I do this, the more the numbers keep landing on the side of the people.

None of this means you get to ignore AI. It’s coming for Kevin’s business and yours, and standing still isn’t the answer either. But you have far more say than the headlines suggest in how it actually goes. You can follow the crowd, cut deep, and take your chances in the 55% who end up wishing they hadn’t. Or you can do the slower, harder, and I’d argue better version. Get honest about what your people are truly great at, aim AI at the work that drains them, and grow the business and the people inside it together.

So the next time you’re up at 3am like Kevin, holding your people in one hand and your profits in the other, I want you to remember that you might not have to let go of either one. You may just be a little ahead of everyone who hasn’t figured that out yet.

Sources

Note: the survivor-syndrome figures (74/69/87%) come from HR-industry surveys — solid but softer than the peer-reviewed and MIT/McKinsey sources. Attribute carefully or swap for a primary source before wide publication.