What Investors Don’t See Behind “AI-Driven Efficiency”...

When a company says AI “eliminated roles,” investors hear margin expansion. Reality is usually more complicated.

Author

Glenda Carnate
January 23, 2026

Read time: 2.5 minutes

An earnings call focuses on savings and efficiency. Three positions were automated, thus reducing overall costs. The story remains the same, and AI is successful in delivering expected results.

A quarter has passed and new jobs have been created in addition to the original roles: Reviewer, Validator and Approver. These are not taking over the prior job; they are working around it instead. Fewer people will be involved at the actual 'task' level, but more will be involved in approving, reviewing, and escalating the task. The organizational chart will now show this new hierarchy. The labor costs will remain unchanged.

Things Investors Discover Through Hard Experience:


1️⃣ Eliminating Roles is Not Equivalent to Saving Money

Labor is re-positioned rather than eliminated.
Solution: Measure net added vs. removed worker roles rather than going by "automation headlines."


2️⃣ The Time it Takes to Scale Reviewers is Greater Than the Time it Takes to Scale Operators

Risk avoidance increases your costs.
Solution: Determine (as an AI user) what processes/steps will be eliminated by AI versus what tasks/processes will receive assistance from AI.


3️⃣ Automated Governance Comes Before Automated Leverage

Control of information occurs before it is used to generate a monetary return.
Solution: Include in your business model the time necessary to add an additional review layer.


4️⃣ The Excessive Headcount is "Optics"-Not Reality

Margins Will Reveal The Truth, Eventually.
Solution: Require process map details (i.e., workflow) vs. Worker Counts.


5️⃣ Increase in Productivity Is Evidenced in Margins Or It Is Not

All Other Forms Of Productivity Are Stories.
Solution: Wait For The Unit Economics Before Expecting Returns.

💡Key Takeaway: 

Rather than failing to automate jobs, AI is demonstrating the extent of oversight needed in the modern workplace. Investors misread this technology by assuming that trust, incentives, and accountability would change quickly and were therefore willing to invest in it.

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