"Wired for Purpose" author Aaron Strout says companies that fired for AI are hiring humans back

The AI layoff wave has a return trip. Nearly a third of U.S. hiring managers who eliminated a role because of AI have since rehired for it, and Ford just brought back 350 veteran engineers after automated quality control fell short.

Aaron Strout, author of "Wired for Purpose," calls it the "AI boomerang" effect. AI is "incredibly effective at certain things," he said, but in many cases human oversight remains necessary, and businesses have overestimated how much of the work it can actually take on.

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The boomerang by the numbers

"Up to 32% of these companies that got really excited — irrationally exuberant, I think, to coin a phrase — laid off a number of their people. 32% of these companies are now hiring these people back,” Strout said. 

A Robert Half survey of 2,000 hiring managers found that 32% eliminated a role primarily due to AI, only to be forced to rehire someone for the same or a similar position. 

Markets have usually rewarded layoffs driven by AI, with Ford’s stock rising 43% in the month after the announcement. This was its best month since the 2008 financial crisis, almost 20 years ago. It peaked at $17.44 before retracing back down to $14.32 at time of writing. 

A case study: Ford 

Ford recently made headlines after it announced that it was rehiring 350 engineers after laying off an unknown number of employees earlier this year and experiencing multiple quality control issues. 

"There's something on the line called computer vision. Think about it as the computer's eyes, and it has a blueprint that it matches up. The problem is, if there's a flaw that's not within its training parameters, it either A, guesses, or B, freezes up,” Strout explained. 

AI cannot deduce in the same way that humans can, nor do they have the decades of experience that makes someone a true expert in their field. 

"They might lean against the chassis on the line and feel a micro-vibration that would alert them to the fact that there's a machine tooling piece that's wearing out — that the AI would never catch. Or notice that the finish on a metal bracket looks dull, meaning there's a structural weakness."

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The bigger lesson

The boomerang effect is not an argument against the usefulness of AI. Strout says he uses the technology “hourly.” What is really is is an argument against replacing the workforce with AI. 

The emerging model isn’t just humans or just AI, it is augmentation of human abilities where AI handles the patterns and veterans handle exceptions.