World of HR: The Netherlands is replacing 25,000 workers with AI

The Dutch government employs a record 160,000 workers, but that number is set to drop as the result of new plans to pivot to AI.

Where in the world? Dutch officials said the government has become too complicated and over-regulated, so it will simplify operations and cut regulations and advisory bodies by 2035 in favor of AI-led efficiencies.

In doing so, the country will cut 25,000 jobs, saving it roughly 3.5 billion euros ($3.9 US dollars) by 2035, and costing some agencies an estimated 60% of their workforce, according to Bloomberg. The Netherlands will announce a rollout plan in early 2027, but officials expect technology to increase productivity by 20%.

“We must make significant cuts to organisational costs,” Eric van der Burg, state secretary of the Netherlands, said in the announcement. “That is why we are going to make tough choices for a central government that really works: simpler, smarter and smaller.”

Some European nations, like France, have already begun embracing AI, Bloomberg reported. And on the other side of the world, New Zealand has started making AI-related job cuts as well, according to the Next Web.

AI could augment public service jobs by 40%, according to a 2024 estimate from the Tony Blair Institute, even as other reports have found that AI creates more work.

“AI can lower the amount of people working in the government, but it can also lead to ‘needs’, such as when government institutions are bombarded by complaints as people use AI-agents to file them,” Marike Blom, a chief economist at ING, told Bloomberg.

Satellite view. As some governments introduce AI to mitigate costs, many US companies are doing the same, with more than 112,000 mentioning AI in layoff announcements so far this year, the Guardian reported. Goldman Sachs analysts estimate that the US economy is losing 10,000 jobs a month, and 9% of workers could be “temporarily displaced” as the economy transitions to AI.

“You don’t want to automate processes that are not optimally structured,” Christophe Le Caillec, chief financial officer at American Express, told CNBC of the company’s decision to cut 5% of its workforce. “So what we’re doing here is to reduce layers and increase spans of controls, so that we can automate and take advantage of AI in the coming quarters and the coming years.”