The news: Several major companies are walking back plans to replace human employees with AI, including Ford, Commonwealth Bank of Australia (CBA), and Klarna.

• Ford is reemploying hundreds of human engineers after experiencing quality issues with the AI systems it had replaced them with, per CNBC.
• CBA is reversing job cuts it implemented last year among customer service staff after finding that the AI systems it was using were “unable to cope.”
• And last year, Klarna rehired employees after its AI customer service system caused the user experience to decline, per Forbes.

Nearly one-third (32%) of US hiring managers have eliminated a role primarily due to AI and later rehired for the same or a similar position, per Robert Half data cited by CNBC.

Charlie Poon, Ford’s vice president of vehicle hardware engineering, told Bloomberg that, “Artificial intelligence is a fantastic tool, but it’s only as good as the information you use to train it. … 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.”

The bigger picture: Over the past year, several large companies have justified layoffs by pointing to AI-driven efficiency gains. In November, nearly half (47%) of US HR leaders named increased use of AI as the most likely factor in conducting layoffs, per Careerminds, and 31% cited the growth in popularity of AI.

In June, AI was the leading reason for job cuts for the fourth straight month, per Challenger, Gray & Christmas, and has been named in 23% of all job cut announcements so far this year. Technology was the hardest hit sector by job cuts, followed by services.

Now, a growing number of companies are finding that AI excels at routine tasks but still struggles with things like judgment, relationship management, and high-level assignments. As a result, some organizations are backtracking or redefining roles to combine AI with human oversight rather than replacing people outright.

This marks a shift from AI replacement to AI augmentation, as some early adopters find the tech works better as a productivity tool than a substitute for human expertise. AI excels at routine, rules-based tasks, but companies like CBA and Klarna have found that the tech still struggles with customer-facing operations and complex decision-making.

Implications for marketers: Human oversight remains critical for brand voice and strategy, and the diversity of thought and experience that comes from teams with a broad range of human skills is highly valuable. The companies that have the most success with AI may treat it as a copilot, which means investing as much in human expertise and workflows as in AI tools themselves.