Malaysian companies that sack workers for AI often rehire at higher cost, proving employees are the real engine of the economy.
THERE is a particular breed of Malaysian corporate genius – you have seen him, he parks his Alphard in the reserved spot, orders teh tarik kurang manis at the mamak but only on cheat days and calls everything a “synergy” – who looked at artificial intelligence and thought: brilliant, I will sack everyone and let the robots handle it.
Clap. Clap. Clap. What a tremendously spectacular goal that is.
Let us walk through this slowly because clearly some people need an explanation delivered at the speed of a tortoise climbing Bukit Nanas.
You fire Timah from customer service. You fire Lim from the content team. You fire half the office and replace them with an AI chatbot that, bless its digital little heart, responds to “my order is wrong” with a cheerful paragraph about company values and a link to the FAQ.
Your customers lose their minds, your Google reviews turn into a crime scene and here is the delicious part – Timah and Lim, now unemployed, are no longer buying your products either. Neither are their families or neighbours, who heard the whole story at the kenduri last Saturday, probably over a plate of nasi impit with kuah kacang.
You see, the economy is not some magical self-cooking maggi. It runs on a basic, almost embarrassingly simple loop: People work ? people get paid ? people spend ? businesses earn ? repeat until Raya bonus.
Break that chain, especially the “people get paid” part and suddenly your entire “record profits” dream starts behaving like unstable WiFi. Blink once, gone.
The economists call this a demand collapse. Makcik calls it padan muka.
Some of these same companies will later sit in meetings, scratching their heads and asking: “Why are sales down?”, “Why is consumer sentiment weak?”, “Why aren’t people spending?”
Makcik, from the back of the room, sipping kopi replies: “Because you fired them, genius.”
It is not a mystery. It is not even economics at this point; it is common sense wearing a name tag and begging to be acknowledged.
Yes, AI can do many things – it can write, calculate, analyse and optimise. Wah, very pandai. But one thing it absolutely cannot do? Be your customer.
And do you know what happened next? The same companies – you know who you are – quietly, ever so quietly, started rehiring. Not with a grand press release. Not with a LinkedIn post about “reimagining talent”. They slithered back, cap in hand, because the chatbot had told a pensioner in Kepong that her refund request was “a fantastic opportunity to explore our loyalty programme”.
Gartner – not some anonymous blogger writing in pyjamas at 2am but an actual respected research firm – projects that half of all companies that cut jobs for AI reasons will be rehiring for similar roles by next year.
One in three of those employers spent more money restaffing than they ever saved from the sackings. Read that again, slower this time: They – spent – more – bringing – people – back.
If that is not the universe administering a firm, well-deserved penampar, I genuinely do not know what is.
Now contrast this embarrassing saga with Ikea – yes, the flat-pack furniture people who quietly test every Malaysian marriage on Sunday afternoons in Damansara.
Few years ago, Ikea chose to train 30,000 employees and 500 leaders on AI tools – not replace them, train them. They built AI literacy programmes, ethics courses and co-developed a generative AI tool with Microsoft to help their workers do their jobs better and faster.
Ford did it. JP Morgan did it. Companies that actually understand that your employees are also your economy did it.
The workers become more capable, the company becomes more competitive and everyone goes home with their dignity intact – revolutionary concept, truly.
On this year’s Labour Day – this very May 1, – Prime Minister Datuk Seri Anwar Ibrahim said something rather sensible at the national celebrations at Unifi Arena in Bukit Jalil.
He called on employers to be more considerate and compassionate in ensuring the welfare of workers continues to be protected.
He reminded the room, with characteristic directness, that without lower-level workers, there would be no companies to celebrate success. These are not the words of someone who thinks Timah is replaceable by a large language model.
These are the words of someone who understands that an economy is not an algorithm; it is people, their livelihoods and their roti canai every morning before the 7am commute.
Here is the thing about Malaysia specifically – our unemployment rate has held steady at below 4%, which the government is rightly proud of. But beneath that headline number, approximately 2.3 million workers – about 14% of the total workforce – are employed in highly trade-exposed sub-sectors such as electronics, chemicals, metals, textiles and transport equipment; all of which are precisely the sectors where automation pressure is most aggressive.
That number sitting quietly in the statistics is not abstract. Those are real people in Penang’s industrial corridor, in Selangor’s factories and in Johor’s manufacturing parks.
We are not Sweden – we do not have a robust social safety net that catches every retrenched worker like a lovely Scandinavian hammock. When you retrench someone in Shah Alam or Butterworth or Kota Bharu, that is a family’s rent, their PTPTN repayment and their mother’s medication from the clinic in Taman Universiti.
There is no glamorous “career pivot” waiting in a co-working space downtown. There is just a very stressful drive to the nearest Socso office and the quiet shame of telling your parents over dinner.
So, when Malaysian companies chirpily announce AI-driven “restructuring” without a single reskilling plan in sight, they are not being innovative; they are being reckless with other people’s lives while calling it disruption.
There is a difference between transformation and abandonment, and that difference has a name – it is called your responsibility as an employer.
None of this means AI is the villain; it is not. Used well, AI is genuinely extraordinary – it catches errors, speeds up workflows, helps a junior analyst do the work of three, and yes, handles the truly tedious parts of customer service so Timah can handle the parts that actually require a human being with empathy and a sense of humour.
The companies winning right now are not the ones who replaced their people; they are the ones who equipped their people.
The choice, at its core, is not AI versus workers; it is whether you see your employees as a cost to be minimised or as the very engine of your enterprise.
One of those framings builds a sustainable company. The other builds a very expensive cautionary tale that gets discussed in business school case studies five years from now.
So, perhaps on this Labour Day, with the PM’s words still warm from Bukit Jalil – our Alphard-parking, teh tarik kurang manis enthusiast may step away from the synergy deck for one afternoon, look around at the Timahs and Lims and Hasans and Kumaris holding his company together and ask himself a simple question.
Not can AI replace them? But why on earth would I want it to?
Happy Labour Day, Malaysia. Jaga pekerja anda. They are not a line item.
Azura Abas is the executive editor of theSun. Comments: [email protected]
