Thirty years running businesses, and I have taken headcount out more than once. The latest trend is focused around AI. AI hasn't been around long enough to be anyone's reason. It is the latest name for a decision companies have been making since automation reached the factory floor, and in the future something else will come along to replace it.

The decision is usually made before it reaches you

Nobody enjoys this work. Most businesses reach a point where performance degrades and the reduction has to happen. Unless it's your company, the decision is usually made by the time it reaches you. The critical component to a successful restructuring comes down to the planning.

During the span of my career, I've sat through numbers coming down from headquarters. Reduce X many heads from each region, by this date, to close a budget gap, and it's always decided from a remote location to where the actual work is taking place.

The latest headlines are saying that a third of companies that cut roles for AI had to hire the roles back, which made me curious to see what type of process they were running. When I read through the rest of the survey, almost 25% of the companies that made those cuts made decisions based on general assumptions about what AI can do rather than on what the roles they were removing actually involved.

WHAT ACTUALLY DRIVES REDUNDANCIES Economic conditions 43% Restructuring 31% Economic conditions and restructuring account for 74% of redundancies. 69% of HR leaders say AI is being used to justify broader change. 32% Orgvue: cut on the AI promise, then rehired 32% Robert Half: same finding, 44% in finance 23% Orgvue: decided on assumptions, not the role Orgvue, 300 US HR managers. Robert Half, nearly 2,000 US hiring managers.

What I put in front of the executive team

What I saw in one company went like this. I pre-empted the request from HQ by sitting with HR and the line managers, mapping out what those roles actually did day-to-day, and put a business case in front of the executive team. Unfortunately, the decision was made to proceed anyway. The work landed on the balance of the team, employee engagement dropped, and then a few people resigned. The response to this was a retention package for the key few we couldn't afford to lose. There were no rehires.

Looking forward, before a headcount needs to be removed, I would want to see two things on paper. What that person actually does day-to-day, mapped end-to-end (not the generic job description), along with who is going to absorb it, the cost of the coverage, and agreement from the line manager who has to live with it when it's done.

Without this it's almost impossible to ensure the end goal can be achieved.