May 27, 2026
Evangelists of artificial intelligence, as well as leaders in that industry, say they believe the estimates of job losses due to AI are vastly overblown. CEOs, though, are telling a different story.
A new study from consulting firm Mercer finds that virtually every employer is planning to cut jobs due to the technology. The 2026 Global Talent Trends report spoke with 825 C-suite leaders, along with 1,650 HR leaders, and a jaw-dropping 99% of the executives surveyed said they expect AI to lead to at least some headcount reduction in the next two years.
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Nearly as many (98%) said they are also planning organization design changes in that same time period.
Meanwhile, just 32% of the CEOs surveyed said they believed the workforce can combine both human and machine worker capabilities in an optimal manner, despite just under two-thirds saying they felt that redesigning work to incorporate automation will drive the greatest return on investment.
Bad news for grads
The discouraging study numbers could be especially bad news for entry-level workers. It could also exacerbate an already worrying situation for recent college graduates.
In the first quarter of 2025, the job market for 22-to-27-year-olds “deteriorated noticeably,” according to a New York Fed report. And things could be getting worse.
A separate consulting firm study by Oliver Wyman earlier this year found that the number of CEOs who were looking to reduce the number of junior roles in the next two years jumped from 17% in 2025 to 43% this year.
A growing number of companies are pointing to AI as the reason for recent layoffs. Meta, which laid off 8,000 employees on May 20, cited technology as the reason. (Another 7,000 workers were reassigned to AI initiatives.) Pinterest, Dow and Amazon have also indicated AI was behind recent layoffs.
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AI risks
While CEOs might be showing more favoritism towards AI these days, they might want to check with their CFOs and marketing departments. Although investors are embracing the technology, consumers are increasingly pushing back.
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A recent JPMorgan report found that despite the market excitement over AI, there has not been a clear increase in usage among either workplaces or households. Economist Michael Feroli wrote that just 12.6% of respondents in the bank’s survey reported daily AI use last week, which was up just two percentage points from a year ago.
Additionally, speakers at college graduations this spring who have sung the praises of AI have been loudly booed.
Some companies are also learning that AI is more expensive than they expected. Uber reportedly blew through its AI budget in just four months this year — and now the company is trying to determine if that money was spent wisely.
“That link is not there yet, right?” Uber president and chief operating officer Andrew Macdonald said in an interview on the Rapid Response podcast. “I think maybe implicitly there is more that is getting shipped, but it’s very hard to draw a line between one of those stats and, ‘Okay, now we’re actually producing 25% more useful consumer features.’
“I think over the coming quarters and years, maybe that will become clearer, but I think today it’s hard, even if some of the underlying metrics are trending in a really astronomical direction.”
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Chris Morris is a veteran journalist with more than 35 years of experience at many of the internet's biggest news outlets. In addition to his activities as a writer, reporter and editor, Chris is also a frequent panel moderator and speaker at major conferences, including CES and South by Southwest.
