Complete article since it's paywalled:
America’s biggest companies say they might need more people after all.
For months, major employers treated hiring as an expensive last resort. Now, a shift is emerging across industries. Companies ranging from railroad giant CSX to Google parent Alphabet GOOGL 0.65%increase; up pointing triangle have told investors in recent days that they plan to hire to meet growth goals or to seize on emerging technologies.
The push to expand head count, at least modestly, is a reversal from the prevailing corporate messaging during much of the AI era. Major employers largely held back on adding people due to economic uncertainties or a belief that artificial intelligence could shoulder more tasks on the job. But some executives say the costs and limitations of AI now demand that more people be added; others want to hire people back following layoffs.
“We actually need to accelerate hiring a bit. We’re a little bit behind right now,” Booz Allen Hamilton’s Chief Operating Officer Kristine Martin Anderson told investors Friday. “We’re addressing that now.”
The government contractor cut thousands of jobs last year as the Trump administration slashed federal contracts and asked firms to justify their costs. Total head count stood at roughly 30,900 as of June 30, down 7.5% from a year earlier. But the company now sees healthy demand for its services, including in national security for workers who need security clearances.
For much of the past 18 months, big employers were convinced fewer workers meant faster growth. U.S. public companies shrank their white-collar workforces. Now layoffs are shrinking. The most recent week of U.S. jobless claims was the lowest on record since 1969, according to federal data.
Part of the change in hiring also reflects a recalibration among employers about what AI can do, said Sarah Franklin, CEO of the human-resources platform Lattice. Many companies stopped hiring entry-level employees, thinking AI agents could pick up the slack. They have since realized that humans are necessary to work alongside AI.
“Just because you have coding agents doesn’t mean you’re not hiring engineers,” she said, adding that companies with AI sales agents also need salespeople.
Across Lattice’s thousands of clients, many are now back in hiring mode for a number of roles, particularly junior positions.
“There’s a big thirst for that,” Franklin said. “What you have now is a realization that you need the AI-native skills. You need this [entry-level] workforce, which is innovative, not calcified in thought. They’re also more affordable because they are newer to the workforce.”
The pickup in hiring goes beyond white-collar professions. Tool maker Snap-on said it plans to add employees to expand its business. CSX said its train and engine service head count will “increase modestly” in the coming months to help it meet higher demand, even as it looks to technology to make up for attrition in other parts of the company. The transport company noted its head count is still lower than it was a year ago.
Workers preparing the invert for concrete in the CSX Howard Street rail tunnel in Baltimore.
Workers at a CSX rail tunnel in Baltimore. Karl Merton Ferron/Baltimore Sun/Tribune News Service via Getty Images
Few companies are saying they plan to go on major hiring sprees, and employers are also making clear they are in the market for certain types of workers.
Alphabet Chief Financial Officer Anat Ashkenazi said the technology company expects to continue hiring in key investment areas such as AI and cloud computing. The software company ServiceNow wants to hire more “quota-bearing feet-on-the-street sales execs” to capture growth in areas like cybersecurity.
M. Keith Waddell, CEO of staffing firm Robert Half, said that AI’s impacts on the job market are proving to be “more benign than some have feared.” The firm works to place people in roles from tech to financial services, and some clients are recruiting again.
“Hiring demand continues to improve and market conditions are increasingly more supportive of our business,” he said.
Some caution, though, that much remains unclear as AI’s ultimate potential continues to evolve. “Do we need more people? Do we need less people?” asked Paul Osterman, a professor emeritus at MIT, and the author of “Disposable Workers,” a new book on the transformation of employment. “We have no idea. No one has any idea.”
Osterman said many companies treated employees as dispensable, cutting them when convenient, or downgrading them into contractor or part-time roles. He expects that trend to continue in this moment of flux.
“AI introduces so much uncertainty with employers, not sure knowing what they need or don’t need,” he said, adding that the drumbeat of AI’s power to displace humans and save shareholders money won’t stop. “Who’s going to be the victim of all that noise?”