Executives Say AI Productivity Gains Fall Short of Real Transformation

WHO:

Business Insider - Charles Lamanna oversees Microsoft’s Copilot and AI agent platforms, Office productivity software, and Teams workplace chat service.

Business Insider - Microsoft’s spokesperson said the company is reconsidering which managerial layers are necessary and where flatter structures can support faster decisions, clearer ownership, and greater autonomy.

Fast Company - Ryan Schmaltz is CEO and cofounder of ReadyAI, formerly Patient Ready.

The Verge - Instagram head Adam Mosseri discussed growing public negativity toward AI and Instagram’s approach to AI content.

Inc - The article reports on executives and companies using AI; it does not name specific executives or companies.

OReilly Radar - James Shore’s *Successful Software* blog is the original source; Shore authorized republication. A CIO with an organization of 170 people is quoted anonymously.

Fast Company - Stellantis is identified as a company working to integrate AI and upskill employees.

TechRadar - Gartner is identified as the source of a report on organizations’ AI productivity and savings goals.

WHAT:

Business Insider - Lamanna’s Teams organization increased managers’ “span of control”; the changes included converting some managers to individual contributors and establishing a ratio of one manager to 12 individual contributors.

Business Insider - Microsoft said engineers are shifting from assembling code line by line to designing and directing an “agentic coding machine.” The company said technical judgment, system design, quality, security, and understanding customers are becoming more valuable.

Business Insider - Lamanna asked Microsoft employees at partner level and above to work in offices at least four days a week, compared with the companywide three-day standard.

Business Insider - Lamanna’s organization offered select U.S. employees the option to relocate to Microsoft offices in Redmond, Washington; San Francisco; or New York.

Fast Company - Schmaltz describes “readiness debt” as accumulating when organizations change workflows or introduce AI without preparing employees or redefining human responsibilities. He says it can lead to inconsistent execution, workarounds, mistakes visible to customers, and declining customer satisfaction.

Fast Company - Schmaltz says AI can turn policies, procedures, job requirements, and real-world scenarios into interactive practice, observe employee decisions, and identify patterns across individuals and teams.

The Verge - Mosseri said AI-related frustration and anger would continue to grow “over the next couple of years.” He said Instagram does not rank AI creators differently, but added, “There’s a lot of great AI content out there, there’s also a lot of AI slop. Do we rank AI content as well as we rank non-AI content? Probably not.”

The Verge - Instagram began cracking down on AI-generated profiles in August and is requiring AI accounts to label themselves so users know whether content is real. Mosseri said banning AI content from Instagram is not practical.

The Verge - Mosseri cited concerns about ownership of content used to train models, safety, job displacement, and people’s fear of being left behind.

NY Post - Employers have cited AI in more than 120,000 announced U.S. job cuts so far this year, more than for any other reason.

Fast Company - A July 2026 Gartner survey found that only 19% of companies are effective at planning for their future workforce.

Fast Company - Two Gartner surveys from May 2025 found that 40% of boards cited skill shortages as a top threat to shareholder value, while 39% of CEOs said their companies lacked the talent needed to deliver financial performance.

Fast Company - An April 2026 Gartner survey found that almost 40% of organizations exceeded their AI spending budgets.

Fast Company - Gartner predicts that 30% of employees displaced by AI will eventually be rehired, often at a higher cost. For a 60,000-person organization, reducing headcount by 2% and later rehiring could cause nearly $100 million in avoidable costs.

Fast Company - Organizations with effective workforce planning are 1.4 times more likely to exceed revenue goals and 1.5 times more likely to exceed cost goals.

Inc - A Deloitte study found that leaders who move AI rollouts ahead of employees and fail to model the change themselves put their return on investment at risk, potentially costing $25.5 million.

TechCrunch - Some AI executives have drawn attention to their disconnect from the general public by bragging about using AI to connect with their families.

Inc - Research cited in the article found that 72 percent of executives say their companies are not truly transforming work with AI. The article says companies are using AI to help employees accomplish more, while the larger opportunity is changing what organizations can accomplish collectively.

OReilly Radar - The CIO measured a 2.1x increase in productivity from AI in a 170-person organization. The article says software development has emerged as the biggest beneficiary of AI automation.

Fast Company - The article describes AI as shifting workplace emphasis from expertise and information gathering toward learning, collaboration, and empathetic leadership. At Stellantis, it says success depends on employee upskilling and making AI work seamlessly for customers.

TechRadar - A Gartner report found that just 3 percent of organizations say they have achieved their productivity and savings goals from AI.

WHERE:

Fast Company - The article identifies Stellantis as the organizational setting for its AI and employee-upskilling example.

WHY:

Business Insider - A Microsoft spokesperson said agentic coding reduces the need for engineers to hand-assemble code and makes some managerial coordination tasks, such as managing handoffs and organizing work across teams, less central.

Inc - The article says automated insights without human understanding can lead to organizational chaos.

Inc - Leaders who move too quickly with AI rollouts and do not model the changes themselves risk losing returns on their AI investments.

Inc - The article says increasing employee productivity alone is not enough; the larger opportunity is organizational transformation.

Fast Company - The article presents upskilling employees and integrating AI into customer experiences as key to success.

HOW:

Fast Company - Schmaltz says organizations should treat workforce readiness as infrastructure and ask how AI changes work whenever a new capability is deployed, alongside cybersecurity, governance, architecture, and return on investment.

Fast Company - The article recommends planning workforce needs from enterprise strategy and funded AI investments, and estimating how work components will be divided between humans and AI.

Inc - Companies are using AI to help employees accomplish more.

OReilly Radar - The CIO assessed AI’s productivity impact by measuring output in the organization.

Fast Company - Stellantis’s approach involves upskilling employees and making AI work seamlessly for customers.

(UPDATED October 29, 2026 16:01 UTC)

Microsoft is widening managers’ oversight, moving some managers into individual-contributor roles and setting a target of one manager for every 12 individual contributors, as its engineers shift toward directing AI coding agents. The company says faster decisions and clearer ownership are goals, while some senior employees in Charles Lamanna’s organization are being asked to work in offices at least four days a week. Across workplaces, leaders are weighing AI’s potential against job cuts, skill gaps and poor returns, with Gartner finding only 3 percent of organizations have achieved their AI productivity and savings goals; experts stress preparing employees and redesigning work, while Instagram says it labels AI accounts but won’t ban AI content.

(UPDATED October 29, 2026 13:02 UTC)

Companies are adopting AI faster than they’re preparing their workforces: only 3 percent say they’ve met their productivity and savings goals, and more than 120,000 announced U.S. job cuts this year have been attributed to AI. Experts warn that introducing AI without retraining employees or redesigning responsibilities can create mistakes, costly rehiring, and weaker customer experiences, while effective workforce planning improves the odds of meeting revenue and cost goals. Instagram head Adam Mosseri says the platform labels AI accounts and does not rank AI creators differently, but acknowledges it may rank AI content less effectively than non-AI content as public frustration grows.

(UPDATED October 29, 2026 12:05 UTC)

AI has been cited in more than 120,000 announced U.S. job cuts so far this year, while only 3 percent of organizations say AI has delivered their productivity and savings goals. Companies are also struggling to prepare their workforces: surveys found that just 19 percent plan effectively, and nearly 40 percent of organizations exceeded their AI budgets. Experts say businesses need to plan how people and AI will share work, invest in employee skills, and have leaders model change; one 170-person organization reported a 2.1-fold productivity increase from AI.

(UPDATED October 29, 2026 10:59 UTC)

Companies are seeing uneven results from AI, with Gartner finding that just 3 percent have met their productivity and savings goals, while 72 percent of executives say their organizations aren’t truly transforming work. Workforce planning is a major challenge: only 19 percent of companies plan effectively, and nearly 40 percent of organizations exceeded their AI budgets, while AI-driven layoffs followed by rehiring could create substantial avoidable costs. Research points to a more strategic approach: align workforce plans with business goals, train employees, and have leaders model change; one 170-person organization measured a 2.1-fold productivity increase, and Stellantis is focusing on upskilling and integrating AI into customer experiences.

(UPDATED October 28, 2026 21:00 UTC)

Only 3 percent of organizations say they’ve met their productivity and savings goals with AI, and a Deloitte study warns that leaders who push rollouts without modeling the change risk losing returns, potentially $25.5 million. While 72 percent of executives say their companies aren’t truly transforming work with AI, one CIO measured a 2.1-fold productivity increase in a 170-person organization, with software development benefiting most from automation. The bigger opportunity is reshaping what organizations can accomplish together, with companies such as Stellantis focusing on employee upskilling and integrating AI into customer experiences.

(UPDATED October 28, 2026 18:01 UTC)

Most companies have yet to realize AI’s full potential: 72 percent of executives say their organizations aren’t truly transforming work, and just 3 percent say they’ve met their AI productivity and savings goals. One 170-person organization measured a 2.1-fold productivity increase, with software development emerging as AI’s biggest automation beneficiary. At Stellantis, success also means upskilling employees and integrating AI seamlessly into customer experiences, while shifting workplace priorities toward learning, collaboration, and empathetic leadership.