Contrary to expectations that AI would replace workers, several companies have recently moved to hire more staff to meet their growth targets. [Getty Images]
Contrary to expectations that AI would replace workers, several companies have recently moved to hire more staff to meet their growth targets. [Getty Images]

Companies that had cut hiring or laid off workers on the assumption that AI could replace employees are now ramping up recruitment again.

The Wall Street Journal reported Sunday that firms ranging from railroad giant CSX to Google parent Alphabet are bringing workers back on board to meet growth targets and secure new technology capabilities.

Christine Martin Anderson, chief operating officer of US consulting firm Booz Allen Hamilton, told investors in a letter July 24 that the company is "a little understaffed right now," adding: "We need to pick up the pace of hiring. We are working on this."

Booz Allen Hamilton provides consulting and advanced technology services to the US government and public sector. The Trump administration's sharp cuts to contracts and demands for cost reductions led the firm to shed thousands of employees last year. As of late last month, its headcount stood at roughly 30,900 — down 7.5 percent from a year earlier. Even so, demand for workers in national security fields, particularly those requiring security clearances, has been rising steadily, and the company appears to be considering additional hiring.

The trend extends well beyond Booz Allen Hamilton. Over the past 18 months, large US companies had been cutting white-collar headcount, but the pace of layoffs has recently slowed. Initial jobless claims for the week of July 12 to July 18 came in at 187,000 — the lowest level since 1969.

Sarah Franklin, CEO of workforce platform Lattice, said employers are rethinking the role of AI. Last year, many companies reduced hiring on the belief that AI-driven changes to how work gets done would allow AI to fill the roles of multiple employees. Now, she said, they have concluded they need people to work alongside AI. Franklin said that "having a coding AI doesn't mean you stop hiring engineers," arguing that companies using AI tools still need employees who can carry out the relevant work.

Franklin added that a significant number of Lattice's thousands of customers have already resumed hiring for multiple roles, particularly entry-level positions. "There is a growing recognition that you need people with AI-specific skills," she said. "You need fresh, innovative thinkers who aren't constrained by conventional thinking."

The shift is visible in manufacturing and major technology companies as well. Tool manufacturer Snap-on plans to add staff to support business expansion. Railroad operator CSX has decided to modestly increase headcount in its train and locomotive maintenance division in the coming months, concluding that even as technology replaces workers in other areas, maintenance is too difficult to automate.

Anat Ashkenazi, chief financial officer of Google parent Alphabet, told the Wall Street Journal that the company plans to continue hiring in areas such as AI and cloud computing. Software company ServiceNow plans to expand its field sales force to drive growth in cybersecurity.

Keith Waddell, president of staffing firm Robert Half, said the impact of AI on the job market "is much more positive than some had feared," adding that "hiring demand continues to grow and market conditions are becoming increasingly favorable for our business."

Even so, concerns persist that advances in AI are adding to "uncertainty" around employment.

Paul Osterman, an MIT professor who wrote "Disposable Workers," a book on shifts in employment, said "nobody knows" whether more or fewer workers will ultimately be needed, and warned that arguments that AI will replace humans and cut costs for shareholders will continue to surface.


kate01@heraldcorp.com