EBN (and most other quick media) blew the lid off the rapidly escalating cost of enterprise AI recently. But in the wake of all the bill shock stories and gotcha moments one important question needs to be answered: when the cost of AI stops looking like a bargain, what will employers actually do?
I've no doubt that some will keep spending and call it "strategy". And some will quietly rediscover the value of human capability. But most will probably do what businesses often do when a transformation gets expensive: keep the tools, keep the cuts, and ask everyone left to work miracles.
The awkward bit comes after the hype
We all know the story well, the first phase of the AI boom was sold with the usual confidence of a new management religion. Faster work, lower costs, leaner teams, and better decisions - a business utopia of low costs and high profits. A future in which software absorbed labour and nobody important had to worry about what might be lost along the way.
The problem is that the bills are now starting to arrive
As EBN and so many others have now pointed out, enterprise AI is starting to look less like a one-off breakthrough and more like an ongoing utility cost - one that can climb quickly and land hardest in functions already under pressure, including HR and talent. If this is how things continue to transpire, AI stops looking cheaper than the people it replaces and employers will hit a second 'more serious' decision point.
And this is where I think things will get interesting. Not innovation interesting. Consequences interesting. What might happen next...
Your employees know the truth. Does your EVP? At Fathom we measure the "Credibility Gap" between your promise and their reality.
Option one: keep going, even if the maths gets uglier
Undoubtedly, some employers will double down.
The maths will get thrown out the window because the political cost of backing off may be worse. Once boards, CEOs, investors and leadership teams have spent two years talking about the miracle of AI as core to competitiveness, nobody wants to be the first one in the room to say the economics look a bit wobbly. In other words, it'll become a case of optics.
The narrative changes - AI no longer has to be cheaper, it just has to be inevitable.
That is how expensive tooling survives. It gets moved from the “efficiency” column to the “strategic necessity” column. Same cost but a different label. What started as labour substitution becomes prestige infrastructure and a mark of technological progress (for progress sake).
For HR and TA, this could mean the worst of both worlds. The headcount cuts stay... and so do the tooling costs. The remaining teams have to deal with the mess and are told it's "transformation".
Option two: pull back, rehire, and admit humans were doing more than the spreadsheet suggested
Some organisations will realise they cut muscle, not fat.
They will find that candidate experience does not repair itself, hiring quality does not improve because a workflow has a chatbot in it, and recruiter capability is still capability, even when finance would prefer to classify it as overhead. They may start rehiring in pockets, especially where the pain becomes visible.
But there is a catch; rehiring now isn't just about filling roles, there will be a reputational element to address, too.
If a company spent the last two years talking up automation and swinging the axe, their employer brand will have suffered. Quality talent will be wise to it. Throw some CEO gaffs into the mix, such as Standard Chartered's "low value human capital" comments, then these employers won't be able to just stroll back into the talent market as though none of that happened. The kind of super talent they'll be hoping can come in and get things back on track will be anywhere from wary to downright allergic to working for them.
Momentum isn’t progress. Especially when you always end up back where you started. Fathom helps you escape the loop. With insight, not intuition. Fathom helps companies build employer brands worth believing in and sticking with.
I kinda hope this happens, at least in pockets, because it will vindicate what I've been preaching these past two years - handle layoffs like real humans and do what you can to protect brand equity and maintain a modicum of trust in the talent market.
This will be an exercise in getting real and winning back broken trust.
Option three: more with less becomes the long-term model
This, regrettably, is probably the most likely.
This will be the path of least resistance - and the least amount of egg on face. It lets employers avoid a full and humiliating retreat while also avoiding the embarrassment and expense of rebuilding. AI remains in place. Teams remain smaller. Everyone is told to operate with focus, agility, and other useful corporate synonyms for insufficiency. Use the AI tools enough to be more productive, but not so much that it gets really really expensive.
This is the version of the future where nobody quite says the plan has changed, but everybody feels that something has been quietly downgraded. The talent market might call it 'part of the cycle'.
Recruitment becomes slower, thinner, and more automated, but is still expected to feel premium. Employer brand gets less investment but more pressure to deliver. Candidate care becomes a lower-cost process wrapped in higher-minded language. Internal teams are asked to do more orchestration, more stakeholder management, more strategic thinking, and somehow less complaining.
In other words, more with less, for longer.
Businesses are very good at turning a temporary compromise into a permanent operating principle. And AI might have brought about the mother of all case studies to prove this point.
Why a grand rehiring wave still feels unlikely
There is a dream version of this story where employers get the AI bill, panic, and hire all the humans back.
That would be satisfying (and good for everybody who works in HR, TA, EB). It would also require a level of corporate self-awareness and honesty that history does not strongly support - we'd be in "hell freezing over" territory.
A standard for the profession. A licence for practitioners. IEBP Practitioner membership includes a full TGS Practitioner licence. The credential that puts a framework behind your practice.
Most employers will not reverse cleanly because reversal is both expensive and has terrible optics. It means admitting that the original business case was incomplete or misjudged, the cuts may have gone too far, and some jobs were more valuable than the transformation narrative allowed. CEOs generally don't do u-turns and investors sure don't want to hear it, either.
So the likelier answer is selective and incremental correction. A few key hires here. A capability rebuild there. Some careful language about balance. Plenty of insistence that the broader strategy remains sound. Which is to say, no heroic return of the humans. More a series of grudging acknowledgements that the humans were still doing rather a lot.
What this means for employer brand
Employer brand teams should not read this as a side issue. It sits right in the middle of the ongoing talent market story being played out around the world.
If the business doubles down on AI while keeping teams thin, employer brand has to resist the temptation to varnish over the gap between messaging and reality. Candidates can smell a polished half-truth, especially when the hiring experience feels automated, delayed, or indifferent.
If the business starts rehiring, employer brand will have to explain why this chapter is different from the last one. Not with a sentimental redemption arc, but with evidence that the organisation has actually learned something.
Helping HR, talent acquisition, employer branding, and company culture professionals find careers worth smiling about.
If the business settles into long-term more-with-less mode, then employer brand has an even tougher job. It has to help hold trust together in an organisation that may be structurally designed to deplete it.
That is the real crossroads. Not AI versus humans - that is too neat and too childish a framing. The real question is whether employers can keep talking about people as their greatest asset while repeatedly treating labour as the easiest line to squeeze. At some point the market notices the contradiction.
The next phase is about credibility, not novelty
The first AI wave was driven by novelty, urgency, and a lot of executive stage lighting. The next phase looks more like accounting, trade-offs, and consequences.
Some employers will keep spending because they believe the long game still matters. Some will pull back because the promised savings fail to show up cleanly enough. Most will probably choose the muddled in the middle, because muddled middle is where modern management goes when it wants to avoid saying “we may have overdone it”.
For HR, TA and employer brand leaders, the implications are clear enough. Watch where the money goes. Watch which capabilities quietly disappear. Watch how the hiring experience changes when budgets tighten but ambition does not. And watch whether the story the company tells about work still bears any resemblance to the one people live.
Because once AI is no longer the cheap answer, employers have to decide what they were really buying in the first place.
TAKEAWAYS
Will employers keep investing in AI if it costs as much as people?
Some will, yes. Once AI becomes tied to prestige, competitiveness, or board-level narrative, it can survive a weaker savings case.
Will companies reverse course and rehire?
Some will rehire selectively. A broad swing back to pre-AI staffing levels looks less likely.
What is the most probable outcome?
A long middle period where employers keep AI, keep leaner teams, and expect the remaining people to absorb the strain.
Why does employer brand matter here?
Because any future rehiring effort depends on trust. If workers and candidates think the business treats people as disposable when the mood takes it, the proposition gets harder to sell.
What should HR and TA leaders do now?
Look past the AI rhetoric and follow the operating model. That usually tells the truth faster than the strategy memo.
EBN
