Firing Your HR Department: Innovation, Illusion, or a Costly Leadership Mistake?
The Hidden Costs of Firing HR: Perspectives From CEOs and Founders
55% of organizations are actively altering their leadership development to prioritize Generative AI and machine learning.
Imagine perfecting your tie, grabbing your coffee, and rehearsing a high-stakes presentation on your commute, only to walk into the office and discover your entire department has been fired. Probably, something like that happened at Bolt, a US based fintech company.
The recent statement by Bolt’s CEO that he has fired his HR department that eliminated more than 90% of his company’s problems, sent a shockwave in the corporate community. To some leaders, it sounded like a bold example of innovation. To others, it represented a dangerous misunderstanding of what HR actually contributes to an organization. On face value it is nothing more than a very narrow view of his experience and its universal application.
This comes at a very opportune time with the strong adaptation of AI in nearly every aspect of corporate. Artificial intelligence is transforming almost every business function. Administrative work that once required entire teams can now be completed in minutes. Reporting, scheduling, documentation, workflow management, onboarding processes, and employee related functions are becoming increasingly automated. Many workplaces are wondering how much workforce, if at all, would be needed, except for smart prompt generators.
However under the crust of it all is the key question of complete human replacement. The real question is not whether AI can replace human resources. The real question is whether AI can replace the judgment, leadership, culture-building, conflict resolution, and human understanding that organizations require to function effectively, and even if by introduction of some great AI agent that can be completely humanized who is to ensure that its decision based on learned behavior would be what is best for humans.
To expand on this issue we gathered expert opinions of some of the key business leaders, HR executives, founders, CEOs, and workplace experts from a variety of industries. While their perspectives differed, a constant emerged: the future may not belong to organizations that eliminate HR, but to those that redefine it.
The Bolt Story Has a Context Problem
Before people start emulating and applying this statement, we need to understand the context. If there is one thing we have learned historically it is that there is no one formula that applies to all.
Corporate turnarounds often require complex decisions. Organizations facing financial pressure frequently restructure departments and move functions just to see if they can be more efficient. However, decisions made under extraordinary circumstances are not necessarily blueprints for every company.
What often gets lost in social media discussions is that organizational context influences organizational choices. A restructuring that makes sense for one company at one moment may be entirely inappropriate for another.
Here is what Linda, founder of TalentGuard has to say about Bolt’s fiasco
“Bolt collapsed from $11 billion to $300 million and 100 employees before Breslow returned as CEO, restructured the people function in a wartime turnaround, and rebuilt it smaller. What’s spreading online dropped all of that context and handed every cost-cutting CFO a named executive and a repeatable line. A 100-person turnaround is not a template.”
Linda Ginac
Founder & CEO, TalentGuard
So Did Bolt Really Eliminate HR Or Just Rename It?
One of the key aspects of this statement is whether the department was just fired or the work? Did the people not process payroll, issue leaves, job offers, recruitment cycles and what not? Did they simply disappear?
Every company still requires hiring, employee relations, compliance oversight, performance management, workforce planning, compensation administration, onboarding, and dispute resolution. These responsibilities do not disappear simply because a department title changes.
In recent years, many organizations have rebranded HR under labels such as People Operations, Talent Success, Employee Experience, or Workforce Strategy. The names evolve, but the responsibilities largely remain.
Perhaps the debate is not about eliminating HR. Perhaps it is about redefining what HR should be doing and what new adaptations and innovations it should spearhead relating to people.
Here is a comprehensive statement by Blaine Little, who currently heads Momentum Seminars.
No, I don’t think HR is antiquated, nor do I ever believe it will be. So long as the focus is on the people, that is. Automation and outsourcing is nothing new to the Human Resource industry. Personnel departments have been contending with those changes for the past three decades or more. The larger question is whether HR has remained focused on its primary purpose. Is it still effective in protecting the organization from unnecessary risk and liability, or has it lost its focus? Bolt didn’t really eliminate the HR department. Ryan Breslow just transformed it by firing all the previous professionals and putting a new sign on the wall. What he truly did, whether on purpose or otherwise, was focus on the basics. I don’t believe the question is whether HR is dead. The department will always exist in some form so long as there are employees. The question is whether organizations have clearly defined what they expect HR to accomplish and why.
Blaine Little
Founder & CEO of Momentum Seminars Training & Coaching
The Real Problem: Administrative HR
HR has always been mocked as a highly administrative function because of paperwork, and paperwork is essential where people are involved.
Paperwork, reporting, policy acknowledgments, benefits administration, scheduling, compliance tracking, and routine employee requests consume enormous amounts of time and energy. These activities often create frustration for both employees and HR professionals.
This is precisely where technology excels. Automation can dramatically improve speed, consistency, and accuracy while reducing costs.
The strongest argument for AI in HR is not replacing people. It is eliminating administrative friction.
This perspective highlights a reality many organizations recognize: automation can remove inefficiencies, but efficiency alone does not define organizational success. Automation cannot alone lead a people’s function and manage an organization of 100 – 10,000 people. It can be a super assistant and remove or improve hundreds of clerical, administrative, calculative and generative tasks. But in the end, that’s it.
AI Is Excellent at Tasks. HR Is About Judgment!
If one would notice, the entire conversation revolves around the difference between tasks and judgment. HR professionals are now waging an internet/social media war on establishing that AI can never replace human judgment and would only be able to perform or execute tasks super-efficiently.
Technology excels at repeatable processes. It follows rules consistently. It processes large volumes of information rapidly. It identifies patterns humans might overlook.
Judgment, however, is something entirely different.
Judgment requires context, experience, emotional intelligence, ethical reasoning, and an understanding of human behavior. Organizations encounter countless situations where no policy, algorithm, or workflow can provide a complete answer.
We took expert opinion of this matter from two experts Kristin Anderson who is the President of Accelerant Growth Solutions and Brian Marks who is the President of Knopman Marks. Here is what they had to say:
“I would not eliminate HR because 90% of HR work can be automated. That assumption confuses labor with judgment. A strong business should absolutely automate repetitive HR work like document routing, onboarding checklists, policy acknowledgments, reporting, interview scheduling, benefits reminders, and basic employee questions. But the work that protects culture, reduces risk, develops managers, handles conflict, and helps leaders make better people decisions still requires human judgment. In growing companies, HR is often the operating system for manager effectiveness. If you remove it without rebuilding accountability elsewhere, issues do not disappear. They move into Slack threads, manager inconsistency, turnover, compliance risk, and avoidable drama. A lean HR team supported by automation can be far more valuable than a larger team buried in manual administration. The right move is diagnosis-first. Map the HR workflow, identify what is policy work, people judgment, manager enablement, employee experience, and compliance risk, then automate the lowest-judgment work first. Done well, AI should free HR to be more strategic, not make a company less human.”
Kristin Anderson
Co-Founder & President, Accelerant Growth Solutions
“For me, removing HR for AI is ridiculous. Our field requires professionals who can manage and grow talent. AI can help in doing some administrative functions but there are some areas which can’t be fully automated. Providing support and solving conflicts are something AI can’t automate. I often see people equating speed with quality – well, that’s not always the case. To me, that’s the biggest risk of using too much automation. A computer can process information much more quickly than humans – but it can’t understand the context and a person’s potential. AI has the tendency to treat people like mere numbers or data. It helps the HR department to improve their work, but it should not replace their role. They often miss the core of how to build a great team. It can easily ruin a company’s culture when human growth is hurt. Overall, only use AI for repetitive tasks, but let people lead and be in charge of people. There should always be a balance with the use of AI – making it a partner in improving services.”
Brian Marks
President, Knopman Marks
Together, these perspectives highlight one of the central themes of this debate: automation and judgment are not interchangeable. However the people who have pieced together this informational article are skeptical about the advents in AI. Maybe AI can excel in human judgment and reasoning, but that would leave a highly uncertain future.
The Human Problems That No Dashboard Can Detect
Workforce analytics is now pervasive and super powerful in the context of organizations.
Organizations can track engagement, retention, performance, productivity, absenteeism, turnover, and dozens of other indicators. Leaders now have access to extraordinary amounts of workforce data.
Yet data alone cannot explain human behavior.
A dashboard can identify symptoms. It rarely identifies root causes.
Employees disengage for reasons that cannot always be measured. Trust erodes quietly. Conflict develops gradually. Burnout often becomes visible only after significant damage has already occurred. The interconnectivity of human actions based on not only organizational experiences, but experiences based on social encounters, upbringing, marital relations, neighborhoods, economic conditions – the list can go on – are myriad and varied. How any automated system can track that is a far thing.
“Running a product-based business has taught me that people are at the heart of all operations. I’ve had to think carefully about what gets automated and what remains human. I don’t believe the question is whether to cut HR. The bigger question is whether your HR team is doing the right thing. If they are overwhelmed with administrative tasks, it only makes sense to use software to handle them. The human side of HR can never be automated. Assisting managers in leading more effectively, preventing good people from leaving and creating a culture in which teams want to show up are areas these tools cannot take over. When two team members have a conflict that’s quietly killing productivity, no algorithm catches that. When a strong performer starts pulling back because they feel overlooked, no dashboard flags it before they’ve already mentally quit. That kind of work requires reading people, not reading data.
The decision of Bolt’s CEO may pay off in terms of cost in the short term. The successful companies that have grown did not remove the people who built and supported their teams as they grew. They got there by making those people more productive, and that is the model we use at Desky, and it works well.”
John Beaver
Founder, Desky
“”You can automate parts of HR like payroll and basic benefits admin. And that stuff can absolutely move faster with the right systems. But the 90% number assumes HR is just a back-office function when it’s not. HR is where the hard human problems land. I’ve been a CFO three times and COO twice. I’ve sat in rooms where compensation gets decided, where people get let go, where someone has to figure out what culture actually means operationally. I’ve made those decisions, too. And I know for a fact they aren’t automatable moments. The companies cutting HR entirely are betting that automation replaces judgment. It doesn’t. The people part is non-negotiable. It’s also where the real competitive advantage lives and why we’ve had the majority of our team stay with us for years.””
Amy Spurling
Founder & CEO, Compt
Culture Cannot Be Automated
The word culture is just thrown around organizations randomly to label simple things as behavior and norms in an organization. After discussing vision for the past couple of decades, culture has become one of the most discussed and least understood concepts in modern business.
Organizations often attempt to measure culture through surveys and metrics. While those tools provide valuable insights, culture itself emerges from human interactions, leadership behaviors, trust, accountability, and shared experiences.
Technology can help monitor culture.
It cannot create it.
Culture develops through conversations, decisions, relationships, and leadership practices that occur every day throughout an organization. The President & CEO of HRDQ Bradford Glaser aptly summarizes this below:
“I work with learning and development professionals every day. The ones struggling most are often operating without proper HR support. HR isn’t just paperwork and policies. It’s the engine behind performance, growth, and team health. When HR is gone, nobody owns the people strategy. And that gap shows up fast. Think about what HR actually does. It onboarded new hires, manages conflict, drives training, and keeps teams legally protected. Those aren’t small things. Those are the things that keep a business running smoothly day to day. Team development doesn’t happen on its own. It takes structure, intention, and someone who owns it. Without HR, that responsibility gets passed around or, worse, ignored completely. Leaders who cut HR often think they’re trimming fat. What they’re actually doing is removing the function that holds their people together. And when people don’t feel supported, they leave. Turnover is expensive. Rebuilding culture is even more expensive. I’ve spent over 35 years helping organizations improve performance at every level. The pattern is clear. Companies that invest in their people function outperform the ones that don’t every time. Cutting HR might look like a smart financial move on paper. But the cost shows up later, in ways that are harder to measure and harder to fix.”
Bradford R. Glaser
President & CEO, HRDQ
The Hidden Cost of Eliminating HR
The easiest decision any organizational strategist or head has to take is to cut costs, historically the first step is always to reduce or remove human costs. However, the consequences of such actions are long lasting and can have a deeper impact.
Many workforce issues emerge slowly. Leadership inconsistency, compliance failures, employee dissatisfaction, poor hiring decisions, and retention challenges often take months or years to become visible.
The danger is not always what organizations lose today.
The danger is what they discover missing tomorrow. Below is what David Salamon, President of eCopier Solutions had to say on this matter.
“I get the instinct. HR can balloon into a compliance bureaucracy that slows everything down, and a lot of the paperwork genuinely can be automated now. Onboarding forms, PTO tracking, benefits enrollment, software eats all of that. But firing the whole department because a tool handles 90% of the tasks misreads what HR actually is. The 10% you can’t automate is the part that keeps you out of court and keeps good people from quitting. Can a bot process a harassment complaint? Calculate a severance that won’t get you sued? Read the room when your best manager is about to burn out? Not yet. That’s judgment, and judgment is exactly what doesn’t show up in a “90% automated” stat. So I’d automate the admin and keep the humans for the human stuff. Cutting HR to zero to make a headline isn’t leadership, it’s a gamble with your liability. The bill for getting it wrong shows up later, and it’s always bigger than the salaries you saved.”
David Salamon
President, eCopier Solutions
Maybe HR Doesn't Need More People - It Needs a Better Purpose
The conversation surrounding Bolt should not lead to blind defense of traditional HR practices. Maybe there is some merit to what he experienced.
Every function should be accountable for creating value.
Organizations must continually evaluate whether their HR activities contribute to business outcomes, employee success, and organizational performance. Functions that have become overly bureaucratic deserve scrutiny.
The goal should not be preserving HR unchanged. The goal should be improving its effectiveness. An expert say on the matter below:
“While I don’t know all of the details behind Bolt’s decision, I understand why many leaders are asking these questions. AI is forcing organizations to look closely at where teams are creating value and where outdated ways of working are slowing progress. The challenge is that eliminating people does not automatically solve a performance problem. If there is complacency, misalignment or inefficiency within a team, leaders first need to understand what is causing it. Firing and rehiring comes at a significant cost, and organizations often repeat the same patterns because they replace people without addressing the underlying dynamics. The better question is not simply ‘What roles can AI replace?’ It’s ‘What is preventing our teams from performing at their highest level, and how do we remove those barriers? AI will absolutely change how organizations operate, but sustainable improvement comes from understanding where teams are stuck and building the conditions that allow people and technology to work better together.”
Rema Lolas
Founder & CEO, Grozaic
What High-Performing Companies Are Actually Doing
Although we see massive layoffs and terminations, that has always been a part of larger organization’s strategy, and cannot necessarily be proportioned with the advent of Artificial Intelligence. Perhaps the most valuable lesson from this debate is that successful organizations are not choosing between humans and technology.
They are combining both. Automation handles repetitive work. Analytics provide visibility. AI improves efficiency.
At the same time, organizations continue investing heavily in leadership development, culture, employee experience, workforce planning, and talent strategy.
The future appears increasingly hybrid. Amir Tavafi of Abloomify has this to add:
“AI increasingly contributes to the company by reducing workloads and allowing companies to prioritize heavier tasks. AI helps companies manage routine work with less time and energy. AI helps companies make smarter and more informed decisions; however, there are limitations to what AI can do, which include HR responsibilities. Humans are irreplaceable in jobs that require understanding and empathy. We need human guidance in the company and make decisions based on experience, assess situations that need trust and empathy, and further the leadership skills of employees. HR is not replaceable. The role of HR is becoming more valuable now even with the rise of AI. HR may use it in processing paperwork, keeping records, and scheduling because it reduces tasks and finishes them more quickly. It allows HR to prioritize people-focused tasks. AI can’t handle things that need human discernment. It will not solve problems involving humans – employee relations, creating a good workplace culture, or molding leadership skills. At Abloomify, we improve the efficiency of the company without removing the human touch. Our technology helps support the company in data-related tasks and allows HR to spend more time making more informed decisions for the company. We always suggest that the combination of AI and HR will be the best tool for the company.”
Amir Tavafi
Co-Founder & CEO, Abloomify
The Future Is Not HR vs AI
After reviewing perspectives from founders, CEOs, workplace strategists, and HR experts, one conclusion becomes difficult to ignore. Although this can become redundant as well with the passage of time and re-invention of work or output methods.
The debate is not really about whether HR should survive.The debate is about what HR should become. AI will continue eliminating administrative burden. It will streamline processes, accelerate workflows, improve reporting, and reduce repetitive work. Organizations that fail to embrace these capabilities will likely fall behind.
At the same time, leadership, judgment, empathy, trust, culture, coaching, conflict resolution, and organizational development remain deeply human responsibilities. The most successful organizations will not be those that choose technology over people.
They will be the ones that use technology to make people more effective.
If traditional HR has become bloated, bureaucratic, or disconnected from business outcomes, leaders should challenge it. If administrative work can be automated, organizations should automate it. If technology can free HR professionals to become more strategic, they should embrace it.
But eliminating the people function entirely misunderstands where lasting competitive advantage comes from. Businesses do not succeed because of software alone.
They succeed because people create ideas, solve problems, build relationships, inspire teams, and drive performance. The future of work is not AI versus HR.
It is HR empowered by AI and how far the HR departments can use AI to impact people and the bottomlines for organizations.