Budgets Tighten As AI Surges

Jeannie Walters 0:00

CX budgets grew just 2% this year. But within those same budgets, AI spending jumped 38%. And a lot of that money has to come from somewhere, and that somewhere tends to be headcount. So with all this cutting going on, what's going to happen in the future? Let's talk about it.

The Rehire Warning From Gartner

Jeannie Walters 0:28

Gartner predicts that half of the companies that cut customer service headcount because of AI will need to rehire by 2027. And frankly, they are probably going to have to spend more than they would have if they had kept the people. So what's going on here? Should we invest in AI or should we invest in people? The simple answer is both. But we, as customer experience leaders, have to be prepared to have these conversations. Leaders currently rank live chat and phone as their most valuable channels ahead of generative AI chatbots. However, those same leaders are saying that within two years, Gen AI chatbots will be their most valuable channel.

Trust Lags Behind AI Spending

Jeannie Walters 1:19

Now, with all the money flowing towards AI, this is a little bit of a disconnect. It's telling us that the money is flowing faster than the trust. So while the money is flowing in, we still don't trust that these channels are going to be able to deliver the types of experience that we want and promise to our customers. We still need humans in the mix. We still need them to approve, to test, to make sure things are accurate and to provide those better experiences when things are nuanced or complicated or emotional or complex. So if you're at one of those organizations that is quickly cutting headcount for the sake of spending more on AI, I encourage you to think about what is the vision that you really have. How are we going to get ahead of the competition if we cut the very people who can help us design for the customers they know? That headline I mentioned from Gartner, there's more to it. Gartner now predicts that across industries, 30% of employees laid off in AI-driven cuts will need to be rehired by 2029, often at a higher cost than if they had never been let go. So we may be setting ourselves up for an even bigger budget crisis when, in short-term thinking, we're actually saying we're cutting costs by investing in AI instead of people. It simply doesn't look sustainable based on what we've learned so far.

Layoffs, Rehires, And The Klarna Lesson

Jeannie Walters 2:57

And there are some headlines that have made this very, very true. Klarna announced they cut 700 customer service representatives in favor of AI and then announced within a year they were starting rehiring back. That's because they realized that it couldn't actually deliver the same way that people can. Now, can AI serve us? Absolutely. Can it speed up processes for customers and provide convenience and easier adaptation of our processes and rules? Absolutely. However, we still need humans. When we talk about serving customers, we're really talking about serving humans. And these AI bots are not going to understand every complex, complicated, and emotional scenario provided. One of the things I hear again and again is that we need more empathy in the world. We need more empathy when serving customers. The only way we're going to get to a place where these chatbots and other tools actually provide that empathy is if we have humans actually training them how to

The ROI Reality Of AI Use Cases

Jeannie Walters 4:08

do that. Service and support organizations spent a median of about $6 million on AI investments in 2025. However, when Gartner evaluated the actual return on those use cases, about 25% delivered negative results. About 25% delivered positive results. And then there was 42% in uncharted territory, in unclear gray area, that neutral zone. We're not quite sure if it's working or not. We don't quite know if we're getting the results we want or not. That's a big chunk that we just don't know if it's working yet. So another way to say this: half of the AI investments right now in spending, they're losing money. And fewer than half of the use cases have been shown worth the investment. Now, again, I believe this will continue to change as we get better at understanding how to use these tools, where they fit in our workflow and processes, and training people to really train these tools better. But until that time, we have to think carefully about where we invest.

New Roles That Keep Humans In

Jeannie Walters 5:20

We're also seeing some brand new roles and alternatives to this. Forrester mentioned how there are roles like bot unlockers. Those are the people who troubleshoot the AI agents. And we also continue to need the folks who handle those escalations, judges and experts to really decide what's the right thing to do here instead of leaving all that discernment to AI. So why am I sharing this with you today? You may or may not have headcount that you're responsible for. You may or may not be looking at a budget right now and deciding where to invest. But I would argue all of us have a stake in this. So if you are deciding even how to use AI or where to incorporate it into your workflows, think about the balance between trying things out, seeing if you get the results, and keeping the humans in the loop, making sure that you have enough investment in the headcount and your teams so that we can actually see the results from the AI investments that we're making. This is brave new world territory. We are all learning this as we go. We are all explorers in this phase. So I don't want to discourage you from exploring how to use AI. I just want to make sure that you're aware of the risks, the risks to your people, the risks to your customers, and the risks to your

Proving ROI With Clear Success Metrics

Jeannie Walters 6:52

organization. One of the things that CX leaders are asked to do again and again and again is to prove the ROI, the return on investment. Why is any of this worth it? Who cares if our customers love us if we can't show that on our profit and loss statement? What we have to do right now is decide what is worth exploring and where can we still invest in the people who will actually develop, design, and deliver the customer experiences that we promise. One of the ways you can do this is be honest about your use cases. Make sure you understand what success looks like before you deploy something. And then measure and be honest about was this a success or not. All of these things that are introduced, they're not just things to try out. They're things that will help us get the outcomes that we need, but we have to understand what that vision is before we just deploy something and cut a bunch of people. Now we're living in a really interesting time right now. There are warnings about AI, there is excitement about it. We don't all know exactly where it's going. You as a leader today, your job is to deliver for your organization. So make sure you understand your organizational goals. And then as you try these things out, tie everything back to those. That will put you in a seat of power where you can then decide this use case was great. This one didn't work. That will show that you are being both financially responsible and also responsible for delivering for your customers.

Test, Audit, And Lead With Why

Jeannie Walters 8:41

Of course, we don't want to deliver technology that will make things more frustrating, less convenient, or worse, provide inaccurate information to our customers. We have to constantly be testing and auditing these tools as well. Now, I hope this doesn't scare you, but I want it to scare you a little bit, honestly. We need to make sure that we understand the why before we just deploy the how. So as we embark on this new world where AI is a part of most things we do, let's make sure we're not throwing out the baby with the bathwater by getting rid of all those customer service agents or a whole bunch of people on the team because we think AI can just do it. It has to be a balance. This is a reshaping, not a replacing. So really be aware of the cost of both sides of these decisions moving

Final Takeaways And Thanks

Jeannie Walters 9:38

forward. Thank you so much for being here. Thank you for all you do. Don't forget to review and rate and share this podcast with somebody you think should hear it. We love hearing from you. You can always leave me a question or a comment at askjeannie.vip. And until then, I'll see you and your AI chatbot next

How To Connect And Go Deeper

Jeannie Walters 9:58

time. If you're ready to turn insights into action, join CXI Membership, our community for customer experience investigators just like you. Get the tools, support, and inspiration to move from ideas to true impact. And don't miss my book, Experience is Everything: Making Every Moment Count in the Age of Customer Expectations. A USA Today bestseller. And if you enjoyed the show, please subscribe, share with your team, and leave a quick review to help others find us. Until next time, keep asking questions, keep improving, and keep leading with experience.