99% of Executives Expect AI to Trigger Layoffs Within Two Years, Mercer Survey Reveals

99% of executives expect AI to trigger layoffs within two years, survey finds

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. A hot potato: Still think the AI-driven jobs apocalypse has been overblown? A new report that interviewed almost 1,000 executives found that 99% expect AI to lead to layoffs in the short term. Moreover, most executives believe that redesigning work to incorporate AI and automation will drive the greatest returns, while just 32% say their workforce can optimally combine human and machine capabilities. Consulting firm Mercer's Global Talent Trends report covers several AI-related topics. The most depressing finding is that virtually every one of the 825 C-suite leaders who participated expects AI to lead to at least some headcount reduction in the next two years. It was recently reported that tech sector job losses in early 2026 have already surged past 100,000, with AI being a major factor in most cases. Unfortunately, this latest survey suggests we might not have seen the worst of it. Interestingly, the report also found that a depleted workforce, worries about AI-driven job displacement, and concerns over inequities in AI access have led to a collapse in the number of employees "thriving." The figure was at 66% in 2024 and has fallen to 44% in 2026. Also, 35% of employees would consider leaving their organization if they felt disadvantaged by unequal access to AI tools or training. This declining motivation is fueling a fall in productivity. Somewhat paradoxically, 63% of executives believe redesigning work around AI and automation will deliver the greatest returns. That optimism seems a little misplaced given a January survey that found more than half of CEOs who had adopted AI had not seen reduced costs or increased revenue as a result. When companies first started embedding AI more widely, executives constantly talked about the technology augmenting and helping humans, rather than replacing them. Today, firms such as Block and Meta are more candid about AI-related layoffs, something reflected in the survey: just over three out of 10 execs think their workforce can optimally combine human and machine capabilities. Another part of the survey looked at drivers influencing C-suite people plans. Digital acceleration, including AI, was the second-highest factor. Somewhat ironically, it sat behind talent scarcity - the top driver. Despite AI becoming increasingly widespread, sentiment toward the technology is not improving. Direct and indirect job losses keep growing, anger over new data centers is increasing, and AI-generated content in almost any medium is often met with public outcry.

99% of CEOs Expect AI-Driven Layoffs in the Next Two Years

Virtually all CEOs surveyed in a recent study said they expect corporate AI initiatives to lead to layoffs within the next two years. According to consulting firm Mercer's Global Talent Trends report, 99% of CEOs are prepared for AI-driven layoffs in the short term. The report says that most executives believe redesigning work to incorporate automation will drive the greatest return on investment, but only 32% said they believed the workforce can optimally combine both human and machine capabilities. The corporate world is eagerly adopting artificial intelligence as the next big profit maximizer. Over the past year, many companies, and increasingly those in Silicon Valley, have claimed that artificial intelligence initiatives are working so well that they can justify massive layoff decisions. But while executives and investors alike have been relatively open about their expectations for an AI-driven white-collar unemployment crisis in the near future, experts are conflicted over whether these commitments are resulting in meaningful productivity gains, while others are discarding AI's potential to disrupt the workforce merely as a strategic tactic used by the AI industry to sell its products. Taking the brunt of this are young workers. According to a recent survey by yet another consulting firm, most of the AI-driven headcount reduction that CEOs are bracing for is expected to focus on early-career positions. The reasoning for that, as it goes, is that AI is best at automating simpler tasks that an early-career worker would be expected to perform at a company as they get on-the-job training needed to mature into higher-level positions. But many executives, dazzled by the promise of an AI chatbot that can finish tasks in mere seconds and work 24/7 without needing so much as a bathroom break, have said to hell with early-career workers and training the future of the workforce. That impact is not hypothetical and has already landed, according to several studies published over the past year. The result has been the grimmest job market for 22-to-27-year-olds since the worst days of the pandemic, and hordes of young people overwhelmingly disillusioned about both AI and their futures. A recent study found that Gen Z's use of AI was plateauing, and members of the cohort increasingly report feeling anxious and angry over the technology. This AI skepticism has infected other age groups as well. An NBC News poll from March found that AI was so unpopular among voters that even Immigration and Customs Enforcement Agency (ICE), the agency at the center of a crackdown which led to massive nationwide protests, was viewed relatively more positively. Setting aside the question of whether this trend of layoffs can actually be justified by AI's productivity gains, workers are impacted by how executives are espousing the technology at the expense of their workforce. According to Mercer's survey, only 44% of employees reported thriving at work in 2026, down from 66% in 2024, and anxiety over AI-driven job displacement is to blame. This existential distress and deep anxiety are prevalent enough among workers that researchers are proposing to coin the term "AI replacement dysfunction" or AIRD to describe it.