Companies Are Cutting Jobs, But They Can’t Replace Knowledge

Companies Are Cutting Jobs, But They Can't Replace Knowledge

- by Doug Shannon, Expert in Artificial Intelligence

The latest headlines say Klarna, Duolingo, Cisco, and others are “replacing workers with AI.” Many are surprised; I am not. Yet, I want us to stop and think before accepting the easy narrative.

Too often, leaders believe cutting jobs equals innovation. They use layoffs to show change, pressure teams, or drive a culture of fear-based adoption. That is not transformation. That is risk.

🔷 AI and automation can only replace what they can understand
🔷 What they understand still comes from your people
🔷 Cut too deep and you will break the workflows you are trying to automate

Before any company says AI will replace a role, they need to prove it, not assume it. The truth is that most AI today, even advanced agentic systems and orchestration layers, still need human subject matter experts and domain knowledge to function. That is why I always say, “It is not fire, it’s don’t hire.”

Keep your experts. If you were going to add headcount, fill those new needs with automation, orchestration, and AI. Not reckless cuts. Not fear-driven layoffs. What is happening in these headlines follows a pattern every leader should recognize:

🔷 Contractors, seasonal workers, and third-party vendors are the first to be disrupted
🔷 Then comes attrition risk as remaining employees quietly prepare their exits
🔷 Each departure takes knowledge with it, increasing disruption

Some companies believe this is the cost of change. I disagree. If you build AI into your workforce with foresight and responsibility, you will:

🔷 Identify where human knowledge is still essential
🔷 Apply AI to augment and scale, not just replace
🔷 Expect and plan for turnover where trust has been lost

The companies that understand this will lead. The rest will cycle through people and platforms until they realize headcount cuts do not create durable value.


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