Org design for growth, not scarcity: why cutting headcount for AI backfires

Eloise Seidelin

March 3, 2026

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5 mins

AI. Restructures. Burnout. Poor tech ROI. Reputation risk.

Organisations everywhere are overwhelmed, and it's tempting to put it all down to change fatigue. Catia Davim and Amy O'Donohue of Simplify Co see something else: redesign avoidance.

AI won't fix a broken operating model. A restructure won't fix an unclear strategy. And technology won't deliver ROI if the work itself hasn't been redesigned.

Catia is a transformation leader and a lecturer at UNSW. Amy built an internal org design practice at TAFE NSW. They joined me on the Change It Podcast, and in the conversations I'm having, it feels like every CEO has been to an AI conference and come back wanting the ROI to be fewer people. These are their views on a better way.

Why cutting heads backfires

Catia calls it a scarcity mindset: how much technology can we add so we can cut headcount? That saves money once. As she asks, what do you do next year, when there's nothing left to cut?

An abundance mindset asks what more the organisation can achieve. The tools are becoming a commodity, so the difference lies in how you redesign around them.

Amy has seen what happens when a team shrinks: the work doesn't go anywhere. It's redistributed to fewer people, and that's where overwhelm, burnout and disengagement come from. In her view, AI also exposes that the work was never designed properly in the first place. The opportunity is to change the way we work, not whether we need humans to do the work. Poorly handled restructures can become a reputational risk too.

What's different about restructures now

Restructures used to be large, centrally led programmes, often with outside help. Now, Amy says, individual leaders are told to reconfigure their teams, make them digital and use AI, often without the tools, time or method. Catia calls it a lonely place. As she puts it, a line manager who has never done a restructure can't just bring in the consultants anymore.

And many leaders, HR and change people have never had to define an operating model.

Where to start when you're told to redesign your team around AI

Slow down to go forward, and talk to the people doing the work. They know where the friction is. Ask what to stop doing, pass on or automate, and what isn't getting done.
Check what the problem actually is. Is it structure, workflows, decision-making, capability or a change in strategy? A restructure only fixes one of them.
Learn the difference between org design, operating model and restructure. Leaders don't need to be experts, but they should be informed buyers.
Design early, and across the whole organisation. Designing team by team no longer works. Time spent up front saves time later.
Keep the technology in its place. In Catia's words, aim for a super team, not a scarce one.

What it means for HR

Amy sees HR business partners caught in a real tension. A leader says they have a structural problem and need new roles, so the easy answer is to agree the structure must be wrong, then recruit or resize.

If HR and leaders share the same informed understanding of org design, business partners can coach instead. They can ask what process the leader has been through, and whether this is really a structure issue at all. Amy's hope is that org design becomes a core capability for leaders and a core skill for HR and learning teams, so both are working from the same language.

What it means for change managers

Catia's view is that redesigning work is becoming a core management skill, and that change managers working on AI adoption need to understand it. Restructures are now constant, not a once-every-five-years event.

Her call to action: get really good at this, because it's going to be a fundamental skill in the future. No longer a dark art, but an actual skill.

Amy's message to anyone feeling overwhelmed: it's okay to feel it, you're empowered to change it, and if you don't have the answers, involve the right people.