Why Most Companies Aren’t Ready to Rely on AI During Economic Uncertainty

In this article, Joe McKendrick explores the potential and limitations of using artificial intelligence (AI) to mitigate economic challenges in times of recession. While AI is often perceived as a cost-saving solution, especially during economic downturns, experts like Phil Fersht, CEO of HFS Research, warn that most businesses are not equipped to implement AI effectively or responsibly. Fersht notes that only about 15% of companies have the infrastructure, culture, and knowledge required to integrate AI in a meaningful way. The assumption that companies can easily lay off workers and replace them with AI is not only ethically questionable but also operationally flawed.

Rather than focusing on replacement, forward-looking companies are exploring how AI can augment their workforce and streamline legacy systems. A growing trend among C-suite executives is to evaluate whether tasks can be handled by AI before making new hires, indicating a shift toward an ‘AI-first’ mindset. However, Fersht emphasizes that people remain valuable through their ability to collaborate, show empathy, and adapt beyond rigid roles. Ultimately, businesses need a clear, strategic approach to AI adoption—not a reactive or desperate one fueled by economic pressure.