Is AI actually creating jobs? Research sheds light on the new tech’s impact
Over the past few years, the automaker Ford has leaned on artificial intelligence to enhance its quality-control tools and catch issues before they hit the factory floor. But it now appears the technology alone wasn’t enough.
Since 2023, Ford has rehired, newly hired and promoted about 350 veteran engineers and technical specialists to fix what its AI tools couldn’t. Charles Poon, Ford’s vice president of vehicle hardware engineering, said the company relied too much on the technology and not enough on its talent.
“Artificial intelligence is a fantastic tool, but it’s only as good as the information you use to train it,” Poon said, according to Bloomberg. “Over prior years, we didn’t pay as much attention as we should have to the experience of our most knowledgeable engineers that have been with us through many product cycles.”
Ford is the latest high-profile case to surface in corporate America. Companies that cut jobs on the promise of AI are finding that placing their trust in the technology was premature.
But a new analysis complicates that version of the story. Ramp Economics Lab found that companies that jump into the deep end, rather than just dipping a toe into AI, are now growing their headcount, especially in entry-level roles.
What’s the pattern?
As companies across industries roll out AI plans, some are realizing that wasn’t the right decision. According to an analysis by the market research firm Forrester, 55% of employers now regret laying off employees due to AI.
“The AI-washing and mirage of future AI collides with operational reality, and many firms are realizing that replacing humans with machines isn’t always cheaper, or smarter, unless they have a complete approach that accounts for the people on whom all AI success will depend,” the group said.
Forrester also suggests that AI is often cited as the reason for layoffs that would have happened regardless of AI, something Straight Arrow has previously reported on.
Gartner, another research firm, came to a conclusion similar to Forrester’s. It surveyed more than 320 customer service and support leaders and found that by 2027, half of the companies that cut staff specifically due to AI will rehire people into similar roles. Emily Potosky, a senior director with Gartner, said AI doesn’t yet have the skills required to excel at these roles.
“AI simply isn’t mature enough to fully replace the expertise, empathy, and judgment that human agents provide,” Potosky wrote in the group’s press release. “Relying solely on AI right now is premature and could lead to unintended consequences.”
Forrester’s report also found that 57% of AI decision-makers expect the technology to grow headcount over the next year, compared with 15% who expect the opposite.
Could AI create jobs?
A paper published on Tuesday by Ramp, which tracks corporate AI spending, and Revelio Labs, a workforce data firm, examined AI spending and headcount across more than 21,000 companies.
Researchers split the companies into two groups: low-AI adopters and high-AI adopters, which spent roughly $30 per employee per month. It found that high-intensity adopters saw headcount grow by more than 10%, with entry-level headcount rising by 12%. This finding undercut the narrative that AI is gutting entry-level jobs.
Additionally, the study categorized businesses by their level of commitment, distinguishing between those making long-term AI investments and those merely taking the technology for a test drive. It found that companies that merely purchased subscriptions and ran pilots but didn’t pursue deeper integration or continued spending didn’t see an increase in headcount.
However, the study’s authors included caveats that double as a reminder of how different Ramp’s sample looks from Ford’s.
What’s the catch?
The authors highlighted only that AI spending and headcount move together, not that one causes the other. The authors say they controlled for this by comparing AI adopters against similar firms before they’d adopted, though even by their own account, the earliest adopters tend to be small, fast-growing, tech-adjacent companies to begin with.
The sample also looks different from Ford. It’s drawn from a part of the economy focused on tech, skewing toward firms with venture backing — very different from a century-old automotive manufacturer rebuilding its quality-control team.
Other researchers studying the same question have arrived at entirely different conclusions. Stanford’s Erik Brynjolfsson studied payroll data from ADP and found that employment among workers ages 22 to 25 in AI-exposed sectors had fallen by 16% since ChatGPT’s release. Other research has pointed to remote work, not AI, as a bigger reason for the increase in unemployment among recent college graduates, as Straight Arrow previously reported.
Yale Budget Lab research director Ryan Nunn told DealBook he hasn’t seen clear evidence that AI is broadly disrupting the labor market. He said current research ranges from “positive to negative to everything in between.”
What the research points to isn’t a clean answer on whether AI helps or hurts employment. Instead, it shows that it’s a split between replacement and augmentation, and Ford shows that both halves can work at the same time.
The company hasn’t pulled back from its AI initiative. Ford now relies on more than 100,000 new AI-powered tests, according to The Verge. What’s changed is the assumption that the technology could run without the people who used to do the job.
Round out your reading
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Ella Rae Greene, Editor In Chief
