A hybrid additive manufacturing process is utilized for creating a shrouded rotor with the shrouded rotor having a hub at a radial center, a shroud at a radial outer side, and vanes extending therebetween. The hybrid additive manufacturing process includes forming the shrouded rotor in stages, with a first stage being formed by depositing material in an axial direction through a first stage of the hub, machining an outer surface of the first stage of the hub to smooth the outer surface, depositing material on the first stage of the hub in a radial direction through a first stage of the vanes and the shroud, and machining all surfaces of the first stage of the vanes and an inner surface of the first stage of the shroud to smooth the surfaces. Subsequent stages of the shrouded rotor are formed similarly to the first stage.