This shift towards AI coding is part of a broader effort to automate and improve the efficiency of HR technology, which is still largely manual and worth over $300 billion.

The future of HR will be dominated by algorithms, with companies focusing on automation, reskilling, and predictive analytics to stay competitive in an evolving landscape.

The integration of AI is anticipated to significantly impact profitability and efficiency, prompting investors to closely monitor Recruit's EBITDA margins and AI adoption rates.

Recruit Holdings is laying off approximately 1,300 employees as part of a strategic shift towards AI to streamline hiring, primarily affecting U.S.-based R&D and sustainability teams.

This move reflects a broader industry trend, with major firms like Meta and Microsoft also prioritizing AI during economic slowdowns, aiming to enhance services for job seekers and employers.

The layoffs, which constitute about 6% of Recruit's workforce, are part of a larger effort to adopt AI-driven processes that are expected to reshape company valuations and market dynamics.

However, there are risks, including overestimating AI's immediate impact on jobs and potential regulatory challenges related to AI bias and privacy.

Currently, about one-third of Recruit's programming code is AI-generated, with plans to increase this to 50%, which will enhance its hiring tools and operational capabilities.

CEO Hisayuki 'Deko' Idekoba, who recently returned to lead Indeed, emphasized that AI will be central to transforming hiring processes, with layoffs aimed at adapting to AI's impact.

These layoffs, mainly in research, development, and sustainability roles, are part of a strategic move to leverage AI for cost reduction and efficiency, with the company also planning to create new subsidiaries aligned with its three-pillar strategy.

Notices for the layoffs were distributed on July 10, 2025, and despite short-term challenges, Recruit's stock rose 2.5%, reflecting investor confidence in its AI-driven future.

Indeed's AI-powered tools, like Rolebot, have already demonstrated significant cost and time savings, reducing hiring expenses and duration by 40%, reinforcing the value of AI in HR tech.