There is a deeper problem brewing underneath the mainstream narrative about AI and job losses. It is not just a matter of simple layoffs where automation replaces the work an employee was performing. We now face an unprecedented wave of skill-based layoffs.

Global consulting firm Accenture made headlines this year by cutting thousands of employees. Accenture CEO Julie Sweet said the company was ‘exiting’ employees who were unable to reskill on AI. At the same time, Accenture employed an additional 37,000 AI and data professionals over two years – going from 40,000 in 2023 to 77,000 in 2025 – indicating a clear dichotomy within the workforce.

We are past debating whether AI will reshape the workforce or replace roles. What matters now is understanding the deeper dilemmas CEOs face today.

A recently published by KPMG study suggests that 69 percent of CEOs surveyed are planning to allocate up to 20 percent of their budget to AI. However, technical infrastructure alone is not going to be enough. Most importantly, they need the right people to collaborate with AI to drive business growth.

This will result in an unprecedented war for digital talent.

Meanwhile, the increasing skill-based layoffs will mean a bigger pool of workers, who are supposedly unable to grasp these new skills, flooding the job market and further complicating recruitment.

Another inherent issue with this approach is that when we lay off employees because they cannot be trained on digital tools, we are also exiting massive business and operational knowledge with them, eroding the company’s ability to innovate, connect, and execute.

As a result, the burden on managers left behind intensifies, as they need to step-up to manage day-to-day tasks as well, resulting in less time available for strategic planning and thinking.

According to IDC, digital skill shortage could cost businesses US$5.5 trillion in lost productivity, delayed projects and missed revenue opportunities by 2026. Every skill-based exit isn’t just a vacancy, it’s a loss of institutional memory and momentum that no AI upgrade can fully replace.

These factors combine to cause a perfect storm, leading to a talent gap that needs to be addressed – and fast.

Three strategic moves for CEOs

Traditional upskilling, in the form of e-learning platforms or one-off workshops, is no longer sufficient. Nor is designating learning and development as the responsibility of HR. It is a strategic imperative which needs to be wired into the very DNA of the organization to truly drive growth, innovation and resilience.

As a CEO, here are three imperatives you should consider:

Build learning ecosystems – not learning systems

Organizations typically have three talent profiles: highly tech-savvy but relatively junior digital natives, mid-career people moving between digital and non-digital worlds known as ‘digital immigrants’, and highly experienced senior staff carrying massive institutional knowledge but who may also be ‘digital novices’.

No group is inherently better than the other as each brings their unique strengths. The key is creating a learning ecosystem where all profiles leverage each other’s abilities.

Marriott International’s Next Gen Marriott Business Council, for example, is a collaborative platform connecting Millennials and Gen Z. Digital natives link-up with senior leaders through targeted forums and mentorship programs, therefore building an ecosystem of leadership and digital skills sharing. Similarly, firms like GE and P&G have introduced reverse-mentoring initiatives, enabling a two-way skill flow.

Reimagine competency frameworks

Research shows that most workforce competency models are outdated, failing to account for the needs of digitalization. Managing careers and performance using obsolete frameworks, and then expecting employees to suddenly become digitally fluent, is detrimental to both people and business.

A fundamental reimagining of the competency models is required, incorporating AI skills as one of the key competencies at all levels and functions – not just IT. Firms need to explicitly redesign roles and competencies with a blend of domain expertise, digital acumen and behavioral skills.

An example of this is executive search firm Russell Reynolds, where managers are encouraged to redesign their teams’ work so that AI agents perform simpler tasks, allowing employees tasks to be upgraded. This is beyond the traditional digital competencies like using enterprise resource planning or spreadsheets. It requires a fundamental shift in skills needed to collaborate with inorganic, but highly intelligent, team members in the form of AI agents.

Build hyper-personalized learning

Frameworks alone rarely work. Hyper-personalized, curated learning pathways aligned to skill levels, job roles and business needs are vital. Generative AI can enable us to build these dynamic, faster, targeted skill building capabilities. Studies show that AI tutors can significantly improve personalized training, deliver more relevant feedback and cut training timed compared to traditional methods.

In addition, non-AI options are equally effective and carry significant value. For instance, DBS Bank’s Gandalf Scholarship program provided employees funding to pursue any learning path they choose, on the condition that they train others on the same path. Remarkably, this initiative enabled around 20 percent of participants to move into new roles within three years.

Similarly, I partnered with one global CPG to build a digital university with curated learning pathways under three schools: School of Data and Analytics, School of Leadership and School of Functional Excellence. Within three months of its launch, more than 1,200 upskilling hours were recorded across finance teams in the Asia–Pacific region – demonstrating how competency-aligned ecosystems can scale impact quickly.

CEOs face a pivotal choice: invest decisively in transforming talent and skills now, or risk not only talent shortages but also losing critical business knowledge that fuels innovation and execution.

Start by auditing your current competency frameworks and digital talent pipelines for AI readiness. Partner with HR, digital leaders and even cross-industry executives, to co-create integrated learning ecosystems that connect AI fluency, leadership and business expertise. Leverage generative AI tools to tailor development paths, power real-time coaching and embed hands-on, continuous learning into daily work.

The future of leadership and business depends on embracing upskilling as a strategic imperative, not just a training exercise.

Opinions expressed by The CEO Magazine contributors are their own.