Half of tech firms plotting restructures as AI hype bites
- Reference: 1757957649
- News link: https://www.theregister.co.uk/2025/09/15/tech_restructures_ai/
- Source link:
Looking at responses from consulting clients, research firm Source said that it found the changes had become a priority among the technology, media, and telecoms sector (TMT).
Using the research firm's database and interviews with 150 clients, Source [1]found that 60 percent of those in the tech sector expect to invest in organizational restructuring in the next 18 months.
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"TMT clients remain unconfident, but advances in AI and new technologies are triggering urgent discussions about business restructuring," the research said.
[3]
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The study reveals around seven percent growth in global TMT consulting, reaching $8.25 billion. Growth last year was flat at two percent.
Tony Maroulis, principal consultant from Source Global Research, said that while the growth was not as high as in 2022, the market slowdown over the last two years has passed. "To a large extent, the crises and uncertainty faced by companies are factored into planning, and the resulting fiscal caution is gradually giving way to more ambitious investment plans," he said.
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The research showed that while 60 percent of high-tech organizations were looking to restructure, 54 percent were looking to change their target operating model, and 60 percent were considering M&As.
"Some of these changes are likely to be induced by AI (organizational restructuring, digital transformation, and operating model transformation). The M&A plan is likely to be driven by a talent shortage," the report said.
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[8]Your call is very important to us – which is why we're connecting you to a human
[9]OpenAI reportedly on the hook for $300B Oracle Cloud bill
"It is impossible to hide from the impact of AI. Few organizations – if any – do not have a roadmap for AI implementation, usually with the support of external help."
Improving tech infrastructure is the most talked-about discussion point for telecoms clients, while media clients are explicitly focusing on using emerging technologies, the research found.
The past year has seen a shake-out at tech companies as they implement AI. For example, [10]Salesforce has slashed 4,000 customer support roles through the application of AI agents.
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"I've reduced it from 9,000 heads to about 5,000 because I need less heads," CEO Marc Benioff told the media.
The company said that using Agentforce internally led to a decline in the number of support cases so that it no longer needed to actively backfill support engineer roles. "We've successfully redeployed hundreds of employees into other areas like professional services, sales, and customer success," a Salesforce spokesperson said. ®
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[1] https://www.sourceglobalresearch.com/reports/9586-the-technology-media-and-telecoms-consulting-market-in-2025
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aMiMaO5j7XJEUZ1ohd3hGAAAAFg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aMiMaO5j7XJEUZ1ohd3hGAAAAFg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aMiMaO5j7XJEUZ1ohd3hGAAAAFg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2025/09/15/full_mcp_support_in_beta_chatgpt/
[7] https://www.theregister.com/2025/09/15/north_korea_chatgpt_fake_id/
[8] https://www.theregister.com/2025/09/12/gartner_support_ai/
[9] https://www.theregister.com/2025/09/11/openai_reportedly_on_the_hook/
[10] https://www.theregister.com/2025/09/02/salesforce_4000_jobs_ai/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aMiMaO5j7XJEUZ1ohd3hGAAAAFg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
"I've reduced it from 9,000 heads to about 5,000 because I need less heads,"
I wish I hadn't sacked my human assistant as I would then have learned about the word "fewer".
Look!
Shiny, shiny.
Dunno what it can actually do or what it can't do but
Oooooh, shiny, shiny.
Correlation is not causation...
The company said that using Agentforce internally led to a decline in the number of support cases
Probably because the internal customers got so fed up with the crap responses that they stopped filing support cases, and just worked-around the problems. By the time the company notices that productivity has dropped it will be too late.
18months? Re-orgs are part of what management does - if not that then how else would they say ‘we are not achieving well now, but we’ll re-org, leverage some synergies and then it’ll all be better’.
After the re-org it’s all a bit chaotic as people are working out how to do things and who does what, so that’s more time, then another six months of waiting before the next re-org to respond to the needs of the business/market or ‘better align with strategic priorities’ etc etc.
In many places, company senior management regularly confuse activity for progress.
These plans are based upon wishful thinking and geek fantasies.
The reality is that these companies will just downsize as the IT sector joins others in decline. AI is too flawed to generate growth and the tweaks that would make it work may not be implemented. Even if they were, the income produced would not match the putative datacentre costs. Government restrictions, geopolitics, taxiffs and the effects of climate events are driving a knife through the global economy.
Being the tech sector, there is a tsunami of spin based on the magic of AI to justify what is essentially emergency retrenchment. It is not a brave new world so much as the wheels coming off the old one. Don't be fooled by the fake values of the stock market. It's a casino, and the stock bubble will eventually burst too.
Every other sector is finding AI to be an expensive white elephant/rabbit hole and just looking at old school cutting back. Natonalist blocks on migrant workers are starving sectors of staff and higher costs/restrictions are damaging supply chains. If you persistently damage the economy with half-arsed political BS, it will decline and crash, and we are now seeing that happen.
'AI' is not fit for purpose.