The HR Function Won’t Survive AI...At Least Not in Its Current Form

AI isn’t just a tool HR will adopt. It’s a force that will fundamentally restructure what the HR function is, who works in it, and what it does. Most HR leaders are not ready for this.

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A few weeks ago, Jack Dorsey cut 4,000 employees from Block, nearly half the company’s workforce, and attributed it directly to “intelligence tools.” Block’s stock rose 17% the next day. The company’s gross profit had grown 24% year-over-year. This wasn’t a company in distress. Dorsey’s message to the industry was blunt: “I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes.”

That came one year after Klarna’s AI assistant replaced the equivalent work of 700 customer service agents only for Klarna to reverse course months later when customer satisfaction tanked and the company realized AI couldn’t handle nuance or empathy. CEO Siemiatkowski admitted publicly that the AI-first strategy “wasn’t the right one.” Klarna started rehiring humans, not to go back to the old model, but to build something new: a hybrid model where AI handles volume and humans handle judgment.

These two stories, taken together, are the single best preview of what’s about to happen inside the HR function itself. Block shows the velocity: healthy, profitable companies cutting headcount by 40% because AI changes the math of work (or so Block said). Klarna shows the complexity: you can’t just rip out humans and declare victory. The real transformation is messier, harder, and more consequential than either story alone suggests.

But here’s the part almost nobody is talking about yet: the Klarna story isn’t just about replacing humans with AI. It’s about the emergence of something entirely new, a blended workforce where humans, AI tools, copilots, and autonomous agents all operate inside the same system. And that changes the core question HR exists to answer. It’s no longer just “How do we support employees?” It’s becoming “How do we design work, capability, trust, and governance in an organization where intelligence is abundant, distributed, and partially nonhuman?” That’s a fundamentally different mandate. And most HR functions aren’t built for it.

There’s an irony unfolding inside organizations right now. HR leaders are spending enormous amounts of time and energy preparing everyone else for AI’s impact on the workforce, running reskilling programs, updating job architectures, building AI governance frameworks, while remaining remarkably blind to the fact that their own function is one of the most exposed to disruption.

What does that disruption look like and what should HR leaders do about it? Let’s do a deeper dive…