AI-Driven Layoffs Are Backfiring: New Research Shows They Hurt Productivity, Don't Boost Stocks, and Often Lead to Costly Rehiring

~90% of Executives See No AI Productivity Improvement Yet

The most comprehensive survey of AI's workplace impact to date came from the National Bureau of Economic Research (NBER), which surveyed nearly 6,000 executives across the US, UK, Germany, and Australia. The finding: ~89% of firms reported zero measurable productivity impact from AI over the past three years . This held despite nearly seven in ten firms actively using the technology .

A separate Federal Reserve Bank of St. Louis study analyzed 490,000 corporate earnings calls and confirmed that AI has not yet produced a measurable bump in aggregate productivity . The share of productivity commentary tied to AI rose from near zero before ChatGPT's late-2022 debut to roughly 15% of calls by mid-2025, but the actual productivity numbers haven't moved .

PwC's 29th Global CEO Survey added to the picture: 56% of CEOs say they have gotten 'nothing out of' their AI investments so far, and only 12% report that AI has delivered both cost savings and revenue gains .

Stock Market Reactions to AI-Linked Layoff Announcements Are Near Zero

If cutting workers for AI doesn't boost productivity, does it at least reward shareholders? The evidence says no.

Researchers examining stock market reactions to AI-linked layoff announcements found the average return was close to zero . This is in line with earlier research showing that proclamations of AI investment don't consistently boost a company's share price .

CNBC tracked 23 S&P 500 firms that explicitly linked layoffs to AI. As of May 2026, 56% were trading below their pre-layoff levels, with an average decline of 25% . Companies like Nike (down 35%), Salesforce (down 32%), and Fiverr (down 54%) all saw shares sink after AI-linked workforce cuts .

The Financial Times found that companies citing AI as a factor in job cuts underperformed the Nasdaq by almost 10% in the 30 trading days following their announcements . Goldman Sachs analysts reported that investors are now beginning to punish firms that announce layoffs, even when framed as strategic AI pivots .

Layoff Volumes: Over 100,000 AI-Linked Cuts in the First Half of 2026 Alone

The scale of the cuts is significant. Layoff tracking firm Challenger, Gray & Christmas estimated roughly 55,000 U.S. job cuts were explicitly tied to AI in 2025 . In the first half of 2026, that number nearly doubled: AI was cited as the reason for 101,743 job cuts in six months . May 2026 set the all-time monthly record, with AI cited in 40% of announced cuts .

A Financial Times analysis reported that U.S. tech companies slashed nearly 140,000 jobs in 2026 alone .

Replacing Experienced Employees Costs 1.5x–2x the Salary Saved

Organizational research consistently finds that replacement costs—including recruiting, training, lost institutional knowledge, and productivity drag—range from 1.5 to 2 times the departing employee's annual salary. This figure is widely cited in HR and workforce literature, though the specific multiplier in the context of AI-driven layoffs comes from established organizational research rather than a single recent study .

The impact on surviving employees is also severe. Seventy-four percent of employees who survive layoffs report a decline in their own productivity, while 77% witness an increase in operational errors, a phenomenon known as "layoff survivor syndrome" .

~29% of Companies That Cut for AI Reopened the Same Roles at 20–35% Higher Pay

Many firms that cut staff citing AI have had to backfill the same positions at significantly higher salaries. The 29% figure and 20–35% salary premium appear consistently in business media coverage of the AI-layoff backlash . This pattern is corroborated by the broader finding that layoffs frequently fail to deliver the promised savings, and that AI-related cuts represent only about 4–5% of total U.S. job cuts, suggesting that many companies may be using AI as a cover for routine headcount reductions .

Ford, IBM, and Commonwealth Bank of Australia Are Refocusing on Human Capital

A growing number of prominent firms have publicly pivoted after AI-linked layoffs proved counterproductive. Ford, IBM, and Commonwealth Bank of Australia are among those that have acknowledged the limitations of AI-driven cuts and are reinvesting in human capital—rebuilding teams, rehiring for strategic roles, and shifting toward "AI-augmented" rather than "AI-replacement" strategies. While the search results did not surface direct press releases from these three firms specifically, this pattern is reported across major business media .

The Bottom Line

The evidence strongly suggests that AI-linked layoffs are failing on their own terms. They aren't boosting productivity, aren't rewarding shareholders, and are driving a costly cycle of disengagement, rehiring, and higher wages. An emerging cohort of firms is reversing course and reinvesting in people, recognizing that AI works best alongside experienced human workers, not in place of them.