Dive Brief:

• Hiring more people often leads to better revenue growth, with 40% of the U.S. companies that raised revenue by increasing their workforce performing better than the 23% of the companies that said they had increased revenue by reducing their head count, according to a new report from software platform Orgvue.
• Companies that “invested in human-fueled growth” delivered twice as much revenue growth (12.2%) year over year, compared to companies that “did more with less” (6.8%). Just 7% of firms were able to deliver repeated revenue increases after routinely cutting staff, and only 2% of companies were able to show growth following this pattern after three years.
• Nonetheless, references to AI in recent 10-K statutory reports were up 48% year on year, despite 94% of Fortune 500 companies saying that AI was a business risk. However, less than half of companies (42%) said AI led to new revenue and just over a quarter (27%) reported that they were “actively applying it in business operations.”

Dive Insight:

Despite the exponential interest in AI and a growing concern that the tech is the cause of a sluggish job market, this research suggests that AI was responsible for “less than 10% of corporate restructures despite $50 billion in severance costs,” according to the report.

“Our analysis shows there’s massive workforce change across America’s largest companies and corporate restructures have increased in cost and scope over the last four years,” Steve Kelly, vice president of user growth and community at Orgvue, said in a statement. “AI is associated with many workforce reductions, but submissions in statutory 10-K reports expose that narrative.”

The majority of corporate transformations (73%) weren’t attributed to AI, but rather to “traditional operational changes such as cost reduction and organizational simplification,” per the report.

In addition, 59% of technology companies said they had increased their head count over the past year, comprising the largest sector across all Fortune 500 firms. Technology companies also added 105,000 employees, recording the highest net rate of workforce growth.

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