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.
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