Key Findings

  • Ernst & Young said on Tuesday that among companies investing in artificial intelligence, 17% reported that productivity gains from the technology have led to workforce reductions.
  • The Big Four accounting firm's survey of businesses showed that more respondent organizations are channeling AI-driven gainsinto new AI capabilities(42%), cybersecurity enhancements (41%), R&D (39%), and employee "upskilling and reskilling" (38%).
  • "The data challenges the headline narrative that AI's primary role is to replace labor," Dan Diasio, EY's global consulting AI leader, said in an email response. "If cost reduction were the ultimate goal, the 17% figure would be much higher. Instead, we see a clear shift in the data from a productivity mindset to a growth agenda."

Deeper Insights

The research from the global accounting and consulting firm comes amid a growing number of reports of AI-driven layoffs, particularly in the technology sector.

HP announced late last month that it expects toreduce its global workforce by 4,000 to 6,000 employeesby the end of fiscal 2028, as part of efforts to "drive customer satisfaction, product innovation, and productivity through AI adoption and enablement."

Meanwhile, Salesforce CEO Marc Benioff said in anAugust podcast interviewthat the company's customer service staff was reduced from 9,000 to about 5,000 after AI agents began handling customer conversations.

U.S. employers announced71,321 layoffs in November, a 24% increase from 57,727 in the same month last year, according to a report last week from outplacement firm Challenger, Gray & Christmas. AI was directly linked to 6,280 layoffs in November and has been involved in 54,694 planned layoffs year-to-date.

Despite the rise in AI-related layoff announcements, EY's survey shows that companies investing in the technology "are not trying to run the same race with fewer people," Diasio said. "They are actually buying the ability to run faster, more complex races," he said. "Leaders are realizing that the true value of productivity gains lies in reinvestment, not one-time cash savings."

The survey found that 27% of companies investing in AI currently allocate a quarter or more of their overall IT budget to the technology, a figure expected to roughly double to 52% next year. The group allocating half or more of their total IT budget to AI is projected to jump from just 3% today to 19% next year.

The research found that nearly all (96%) organizations investing in AI have realized productivity gains from the technology, with 57% reporting "significant" improvements. EY said a majority (56%) of respondents reporting positive returns on AI investment saw "significant, measurable improvements" in overall financial performance.

Sixty percent of respondents investing in AI technology said that employee time spent on responsible AI training has increased over the past year.

EY said the survey of 500 U.S. business leaders was conducted between September 19 and October 16.