Overhiring Blamed For Layoffs, Plus Who’s Using AI At Work


Tired of hearing the same old excuse (“Sorry, we overhired!”) for layoffs? You’re not the only one.

I wrote about a new report from jobs site Glassdoor, which publishes anonymous employee reviews. It found that the share of reviews mentioning overhiring has increased 24% since last March, and is up more than threefold since 2022. Not only is overhiring getting more mentions, but it could be one of the reasons employee confidence remains low.

When companies lay off employees and blame it on overhiring, those who remain are likely to feel discouraged and question management’s decisions, especially if the quantity of work stays the same or increases, says Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton School. That sounds about right.

Take the technology industry, where more than 191,000 workers lost their jobs last year, according to Crunchbase. After hearing the “overhiring” rationale, employee confidence has fallen nearly 12% since last year. The result? Employees remain stuck, demoralized, and unproductive at work, as fears of more layoffs have them updating résumés between meetings and deadlines.

On the bright side, employee confidence in their employers remains highest in some of the most stable industries, such as education and healthcare. According to Glassdoor, they accounted for 59% of jobs added in the U.S. so far this year. I’m not sure I’m ready for a complete career change, but would you consider changing industries to tame your layoff fears?

Also a quick happy 20th anniversary to Gmail! (A little meta-celebration if that’s where you’re reading us from today.)

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Americans are increasingly using artificial intelligence more than they were a year ago: According to new research by the Pew Research Center, the share of American workers using AI for work has risen to 20%, up from 8% in March 2023.

But which workers are using AI—and how?

“There is a vanguard of people starting to become heavy AI users who are not technical talent,” says Aaron De Smet, senior partner at McKinsey and author of its latest generative AI report. Non-technical workers refer to employees who are not building AI software and thus find themselves using it to complement their tasks. Think project managers, nurses, or salespeople.

AI technology has allowed them to become more productive and efficient in their work, De Smet says. But what managers are not paying attention to, he says, is the level of burnout heavy users of AI are experiencing.

“There’s a surprising number of people who say ‘I’m using AI and it’s working. I’m more productive and effective than I’ve ever been,’” he says. A two-hour task may turn into a 10-minute deal with AI. That also means employees are spending more time doing “higher level” work, but if the frequency increases too much they could quickly burn out, which could lead to workers searching for a different job.

While some may be lured away by higher salaries or a better title, the McKinsey study found higher pay wasn’t the top reason people were leaving—instead, they’re looking for “meaningful work” and more flexibility with their time. Employees want to know they’re working toward a goal and feel aligned with the company’s mission.

In a way, more AI use will mean companies need to focus more on the human element of work. As you spend more time using AI tools, you’re going to want more flexibility, more wellness benefits to prevent burnout, and more reassurance that you’re valued. Put another way: It’s going to become even more important that your company treats you like a person at work.

“A couple hundred years ago, the Industrial Revolution dehumanized work,” says De Smet. “And now automation and AI are rehumanizing work.”

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