Senior leaders at major global firms, including Amazon, have signalled a sustained reduction in corporate workforce size, attributing this shift to the accelerating integration of generative AI across business functions. Amazon’s CEO Andy Jassy stated that further reductions in white‑collar roles are “inevitable” as AI agents replace repetitive tasks such as coding, customer service and HR administration.
This trend extends across the tech sector. European companies such as Klarna have begun internal restructuring, deploying AI to streamline operations, reassigning roles into talent pools and creating uncertainty among staff. Within cloud services, Amazon Web Services (AWS) has cut hundreds of jobs, despite reporting strong revenue growth, highlighting the disconnect between financial success and headcount reductions.
A Broader European Reality
Though many high‑profile examples stem from US tech giants, European firms are also affected. Stellantis, Volkswagen and Volvo Trucks have all announced layoffs since April, citing cost pressures and automation plans. Banking groups such as Commerzbank, HSBC and UBS are actively reducing staff numbers. Even luxury brands and retail chains have joined the trend in response to global economic volatility.
Workforce Impact: Reskilling and Restructuring
In Europe, an estimated 38 per cent of HR professionals now report investment in AI tools, up from 33 per cent in 2024. Yet as AI becomes more deeply embedded, the balance between role replacement and redesign is coming into sharper focus.
The World Economic Forum’s 2025 Future of Jobs report indicates that around 40 per cent of employers expect to reduce staffing in roles vulnerable to automation, particularly at entry level, while generating new roles in more strategic areas of the business. McKinsey research underscores that while most companies have begun implementing AI, fewer than one per cent consider themselves mature in its deployment—indicating a gradual but transformative phase of slow evolution rather than instant revolution.
HR at the Eye of the Storm
HR departments are faced with managing disruption while being transformed themselves. In April and May 2025, IBM quietly replaced several hundred HR roles with AI agents, as part of a wider shift in how talent management functions are delivered. Industry leaders at recent HR conferences emphasised the dual role of HR professionals: to steward human‑AI collaboration and to oversee employee wellbeing, fairness and transparency in AI governance.
Academic research has illuminated further concerns about AI integration, noting that without proper oversight employees report rising anxiety around job security, fairness, privacy and trust. Measures such as transparent communication, inclusion in AI deployment and structured learning opportunities are essential to safeguard employee experience.
What This Means for European HR Leaders
For HR leaders in Europe, the implications are multi-layered. Strategically, organisations must prepare for long-term shifts in how workforce models are designed. While AI may not replace all roles, it will reshape many, requiring proactive redesign rather than reactive cuts.
Policy and regulatory frameworks will also play a critical role. HR teams must work closely with legal and compliance colleagues to ensure the use of AI is transparent, ethical and aligned with EU rules on fairness and data protection.
A renewed emphasis on reskilling is essential. Organisations should prioritise AI literacy and digital upskilling across all levels of the workforce, enabling employees to pivot into higher-value roles as automation takes over routine tasks.
Employee wellbeing cannot be an afterthought. With anxiety around job security growing, HR teams must invest in open dialogue, mental health resources and opportunities for staff to co-create their future roles. Involving employees in the AI transition can reduce resistance and build trust.
Finally, the HR function itself must evolve. No longer limited to transactional processes, HR leaders are being called upon to act as architects of future work—designing roles, managing technological change and ensuring that humans and machines coexist productively and ethically.
Conclusion
As AI reshapes the modern workplace, European HR professionals must lead the adaptation. The imperative is clear: balance efficiency with ethics, reskilling with reassurance, and strategic transformation with a human‑centred approach.
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