The scenario isn’t hypothetical: Some of the companies that went furthest in replacing people with AI have had to backtrack. For example, in 2024 Klarna became a European benchmark for what AI could do for a company. Its AI assistant handled two-thirds of customer service chats in its first month, performing the equivalent of 700 full-time agents. As a result, company leadership decided to freeze hiring, and the workforce shrank from around 5,000 to 3,800 employees. In fact, the company reversed course, rehiring human agents to ensure customers could always speak to a person.