AI has become a trigger word for thousands of skilled professionals worldwide. From students booing commencement speeches celebrating AI as the next industrial revolution to thousands of laid-off employees, people are sick and tired of being reminded how replaceable they are. No one feels excitement at the prospect of being automated out of their job. No wonder that CEOs championing their AI initiatives and simultaneously laying off employees have been labeled tone-deaf, psychotic, apocalyptic, or delusional. Company announcements about going AI-first can quickly become PR nightmares. And if CEOs at Nvidia, Microsoft, and OpenAI can afford to be cryptic and blunt, a small enterprise may not survive the public uproar.
The AI transformation has gotten real
The era of throwaway AI pilots is over. The idea that AI is just a tool is also over. Many companies have moved past the exploration phase and now have a clear understanding of the exact functions that can be automated. After all, we’re in the fourth year of generative AI. Accenture’s recent report reveals that AI experimentation is giving way to mature adoption: 64% of surveyed businesses have scaled advanced AI into live production across several units or have initiated synchronized, firm-wide rollouts.
Company-wide AI adoption inevitably leads to some sort of reorganization. From my experience running a software development agency, I’ve also noticed a rise in prospects looking for AI automation services or tailored solutions to transform their workforce with the help of AI.
Whether that transformation will lead to layoffs or result in scaling without increasing the headcount will depend on specific business needs. For example, the payroll startup Remote recently proved you can grow revenue by 50% per employee without adding a single new hire. In both cases, leadership needs to communicate the inevitable change in a way that won’t sabotage their plans and create more problems than they had before.
Communication failures cost you reputation and money
Announcing an AI initiative requires careful planning. Boardroom language should never leave the room. Behind those closed doors, it’s called shuffling resources and embracing the future. In plain terms, it’s cutting livelihoods and writing off someone’s skills and years of hard work.
Take, for example, the mistake of Bill Winters, CEO of Standard Chartered. He said the London-based bank would replace “lower-value human capital” with artificial intelligence. In an attempt to appeal to investors and demonstrate progress and innovation, Winters completely ignored the backbone of the organization — humans making this progress possible in the first place. Sure, he tried to clean up the mess he’d created, but his attempt wasn’t taken seriously. His reputation took a hit.
It’s not only your reputation that is at stake. The constant fear of job loss, fed by waves of layoffs, has changed the dynamics inside teams, and not in a good way. Many workers have recently confessed that cooperation and collegiality are diminishing, and conversations between employees and managers are no longer that chummy. It might be a gradual path toward a toxic work culture, and it’s a given that such environments hinder employee performance and productivity.
Glorifying AI’s capabilities and flaunting your own obsession with it is another thing common among CEOs and disliked among employees. Who, in their right mind, would want to trade sleep and time with loved ones for building another coding agent? Garry Tan, CEO at Y Combinator, would. In fact, he was so hyped about his Claude setup that he didn’t even need to take modafinil (a sleep-preventing drug); he had natural insomnia and could easily get by on only four hours of sleep.
How to announce your AI transition without scaring your employees
So, is there a way to communicate your AI transition and your high hopes for the AI revolution without turning yourself into a clown? It may sound like a phrase from a Disney movie, but you just need to be honest. It’s that simple.
Radical transparency has been foundational to Redwerk’s culture. It is one of those corporate values that helps with both client and employee relationships. Just like you wouldn’t want to mislead a customer about how much time a certain feature takes for the sake of keeping the existing relationship, you wouldn’t want to mislead an employee into believing their role is safe no matter what.
Be radically transparent from the start
Rather than offering false reassurances that AI won’t affect anyone’s job, explain how it will. AI does speed up and automate certain kinds of work — pretending otherwise erodes trust. For the first time in history, building apps with AI has become truly affordable for SMBs. Engineering that took months now takes weeks, and that naturally affects the business models of thousands of companies. Expensive SaaS platforms are being replaced with hyper-personalized tools, and agencies like Redwerk are shifting value from raw coding to architecture, security, and a product-first mindset.
Rethink how work gets done: redesign processes, set new KPIs, and communicate the new expectations upfront. Many employees cite a lack of information about potential layoffs as the reason they feel nervous and can’t focus on their work.
Also, if you overhired during the pandemic and layoffs are not necessarily related to AI, just say it. Admitting your own hiring mistakes sounds way better than using AI as an excuse.
Ensure a merit-based process
Employees willing to learn and adapt shouldn’t fear replacement. If a reduction in force is the only way in your case, make sure the whole process is merit-based. Even though we all know life is unfair, it’s leaders who can directly impact this process and make it more transparent, empathetic, and less hurtful.
Survey employees to determine who’s open to skill re-evaluation and reskilling and who isn’t. Trust me, there are always going to be employees ready to move on — someone who knows they’ve stayed in their comfort zone too long and takes this change as a sign to finally start a new chapter.
Tech giants like Microsoft came up with voluntary buyouts, but of course, it’s not a feasible strategy for SMBs, and it also drew its share of backlash on social media.
Showing empathy is the way
What excites CEOs and employees about AI might be completely different things. In times when employee perception of workplace empathy is at an all-time low, top leaders should be more mindful of how they communicate strategic changes caused by AI. They need to consider the feelings and likely reactions of all stakeholder groups, including customers and employees, not just VC investors.