CIOs see AI prompting new IT hiring, even as boards push for job cuts

CIO expectations that AI use will create more IT jobs appear to be on a collision course with cost-cutting demands of CEOs and board members looking to AI to shrink the workforce.

Many company boards now insist on using AI to cut workforce costs by about 20%, but IT leaders largely believe they will be able to hire more staff to implement generative AI solutions.

Nearly seven in 10 IT leaders plan to increase headcount in response to gen AI, according to a Deloitte survey of C-level IT leaders released in June. Most CIOs see the need to hire additional AI experts to ramp up their capabilities before enabling some AI-driven efficiencies, says Lou DiLorenzo Jr., practice leader for technology, AI, and data strategy at Deloitte.

While AI may enable some workforce reductions, DiLorenzo doesn’t see huge AI-driven cuts in IT budgets and teams in the near future. Even as many organizations infuse AI into software development and tech support teams, most enterprise leaders DiLorenzo speaks with see a slowdown in hiring new developers and IT support staff, rather than layoffs for current staff, he says.

“The encouragement that I give is that people who know AI will replace those that don’t,” he adds. “Whether it’s a functional or a technical job, it’s an important skill set to have. If a software developer is not using AI development tools, it’s going to be a challenge.”

Job cuts already happening

But in the weeks leading up to the release of the Deloitte report, Meta, Salesforce, Microsoft, Dell, and Intel collectively announced more than 24,000 job cuts related to AI, and Amazon CEO Andy Jassy predicted future job losses at his own company — and across the work world — as AI creates efficiency gains. It’s unclear how many of the layoffs were in IT departments, but about 800 of 2,000 jobs lost at Microsoft in May were software engineers.

IT leaders themselves seem to have conflicted ideas about the future of work in the age of AI. More than half of those responding to CIO.com’s State of the CIO Survey 2025 believe AI will enable workforce reductions in the near future.

But for now, CIOs seem to want to protect their own turf, with more staff necessary to address the challenges of implementing new AI tools, according to the Deloitte survey. “Before processes get reimagined and work gets done differently, they need people, talent and capacity to help inject that change into the system before you get to a sustainable equilibrium where you’re seeing the impact of that reimagined work,” DiLorenzo says.

Other IT and business leaders see the CIO perspective on AI creating bigger IT teams as being in direct conflict with cost-cutting initiatives from CEOs and board members, but some believe the two sides are simply operating on different timelines.

Some AI experts see a distinct split between leaders who want to use AI to cut costs and those who see it as an employee enhancement tool, but they suggest that there are CIOs, CEOs, and board members on both sides of the argument.

The ground-level perspective

Camille Fetter, CEO at Talentfoot Executive Search & Staffing, sees a strategic disconnect between the CIO growth agenda and the cost-cutting board member perspective.

“CIOs are hands-on with AI — they’re piloting tools, redesigning workflows, and seeing new needs emerge in real-time,” she says. “On the flipside, boards are viewing AI from 30,000 feet, often through a narrow lens focused on cost-cutting. Many board members haven’t engaged directly with AI tools, which limits their ability to connect AI to long-term value creation.”

Many board members are fixated on job elimination, instead of seeing the potential for AI to redefine how businesses create and deliver value, Fetter adds. “Boards ultimately want to save, whereas CIOs see opportunity, and AI is widening this gap,” she says.

CEOs and board members pushing for quick cost savings may be jumping the gun, some observers say. Before companies can cut workforce costs with AI, they need the technology to work, says Michael Trezza, CEO of AI consulting firm Lithyem.

“To reduce headcount, you first need working systems,” he says. “To build working systems, you need people who know how to set up and manage AI. That’s why tech leaders are adding staff right now.”

Some jobs will disappear, but at some companies, new jobs will replace the old ones, Trezza says. “The winners are the ones who plan, clean up their workflows, and use AI where it actually makes sense,” he adds.

Many CIOs are under pressure to use AI to reduce costs, but CEOs and board members need to understand that doesn’t happen overnight, adds Todd Loiselle, CIO of food distributor National Food Group.

“We understand that real productivity gains don’t come from a slide deck — they come from execution,” he says. “And before we can reduce labor, we have to remove the work. That takes time, precision, and the right partners.”

It takes time to securely deploy and responsibly govern new AI tools, Loiselle says. Only after several steps can companies then scale automation and, in some cases, rethink employee roles.

“We’re on the hook to prove AI is worth the investment,” he adds. “But expecting productivity gains before the foundations are in place is shortsighted.”

Hard questions coming

Many CIOs will have some time between AI deployments and hard questions from board members about cost savings, Lithyem’s Trezza says. But the honeymoon may only last six to eight months, and he’s seen tensions building in the companies he interacts with or hears about.

“Most CEOs and board members were sold on AI as a cost-cutting tool,” he adds. “When the savings don’t show up fast enough, or at all, the patience wears thin, especially if the investments were significant.”

However, many organizations have skipped crucial steps to achieve successful AI projects, including collecting the right data, building clean processes, and launching change management initiatives, Trezza says.

“The challenge is that AI isn’t a vending machine,” he adds. “You don’t plug it in and get savings next quarter. That takes a lot of work and some time. Most organizations skipped that prep, so now CIOs are stuck trying to deliver results without the foundation.”

National Food Group’s Loiselle encourages fellow CIOs to be picky about the AI projects they launch.

“I don’t ask for approval unless we’re confident the project will either increase revenue or reduce costs,” he says. “Efficiency is nice — but it’s not the reason. If we can’t tie the initiative to a financial lever, it doesn’t make the cut.”

CIOs should also set expectations about AI projects and abandon the sunk-cost mindset, he adds. “If we don’t hit certain thresholds by a certain timeline, we pivot,” he says. “We’re not doing innovation for the sake of innovation — we’re driving toward tangible, measurable outcomes.”

At some point, CIOs will be held accountable for hours saved, processes eliminated, and cost per outcome, adds executive recruiter Fetter. CEOs and board members will measure CIOs based on FTE hours reduced through automation, shorter cycle times, fewer errors, and margin improvement linked to AI-driven efficiencies, she adds.

“CIOs are absolutely on the hook,” she says. “Boards aren’t just asking if tools were deployed, they’re asking, ‘Did they move the needle?’ Metrics matter more than ever.”

CIOs who can tie AI to bottom-line results will become indispensable, Fetter says, but those who fail will have a short shelf life.

“To deliver, CIOs must drive adoption across functions, upskill teams, and redesign how work gets done,” she adds. “The role is shifting, from tech operator to enterprise transformer. CIOs who can’t prove ROI won’t keep their seat.”