When AI Eats Its Own Foundations

Tech companies around the world are currently cutting thousands of jobs—nearly 80,000 in the first quarter of 2026 alone. This move is often justified as a necessary investment in artificial intelligence. The underlying assumption is that AI boosts productivity and reduces costs in the short term. But this very connection has so far been scarcely substantiated. Those who simultaneously reduce their expertise risk losing precisely the skills needed to use the technology productively.

The financial impact is overestimated

Many organizations currently treat AI as an investment with a quick return on investment. This is based on the expectation that agent-based systems will quickly take over workloads and thereby immediately reduce costs. Gartner, however, paints a different picture: A survey of 350 executives whose teams already use AI agents, intelligent automation, or autonomous systems shows that four out of five companies have reduced their workforce—yet this makes no difference to the ROI. The data suggests that the return on AI investment does not come from job cuts, but rather from the organization’s ability to enable people and autonomous systems to work together effectively. Companies that perform better invest more in training and operating models that empower people to manage and scale autonomous systems.

Skills disappear before new processes are up and running

The primary risk associated with financially motivated job cuts is operational in nature: companies lose expertise before new structures are actually up and running. AI implementations, in particular, require people who can define requirements precisely, understand data flows, evaluate borderline cases, and take responsibility for quality. In-depth knowledge of processes, exceptions, customer requirements, and risks is rarely fully captured in documentation. This knowledge is grounded in people with years of experience, established routines, and the ability to interpret signals early on. Anyone looking to implement AI should therefore allocate budgets for retraining to prepare employees for new roles and nurture talent.

Retaining knowledge within the company pays off

This is particularly true when it comes to the so-called “copilot economy”: Here, generative AI evolves from a mere tool into an intelligent, autonomously acting copilot that integrates seamlessly into business workflows. When human judgment and machine capabilities work together, the desired efficiency gains come within reach. A prerequisite for this is combining existing subject matter expertise with practical AI application—especially in specific fields such as finance, HR, or engineering. Continuing education programs that provide hands-on experience in specific application areas and lead to recognized certifications better prepare workforces for the new requirements than broad, non-specific AI training courses.

AI Transformation Requires a Talent Strategy

Those who cut back on expertise to finance technology are sawing off the branch on which successful AI implementations rest. The waves of layoffs in recent months follow this logic and thus risk undermining precisely what they are supposed to enable. Clear operational models are essential for autonomous systems to function safely, transparently, and at scale. Equally crucial is continuous investment in people. Companies with a long-term perspective—such as owner-managed firms that don’t focus solely on quarterly optimization—find this easier. They can treat continuing education, certifications, and university partnerships as strategic constants, not as cost-cutting measures. In the coming years, AI will penetrate roles and decision-making processes even more deeply than many anticipate today. Implementation expertise is key: Companies that have maintained and strategically expanded their knowledge base lay the groundwork for systems that deliver reliably and justify the ROI that many are already factoring into their costs.

About the Author: Suvish Viswanathan is Regional Director for DACH at Zoho and observes these developments from a corporate perspective characterized by a long-term focus that is unusual in the tech sector. Zoho has been owner-managed for three decades, has grown without venture capital, and develops its own products. Despite numerous market upheavals, the company has not recorded any operational layoffs in its 30-year history.

More information: www.zoho.com/de