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Survey reveals that 99% of CEOs now expect AI-driven layoffs — companies are racing to replace junior workers with AI, even as many executives remain uncertain about the returns on AI investments
A recent study by consulting firm Mercer has revealed that an unprecedented 99% of CEOs envision AI-driven layoffs in the short term. The survey, which covered 12,000 C-suite executives, HR leaders, employees, and investors, showed that an overwhelming majority of executives expect AI "to lead to at least some headcount reduction in the next two years." At the same time, work and economic anxiety are increasing among employees, while workplace well-being has plummeted, with the portion of workers reporting that they "feel good at work" dropping from 66% in 2024 to just 44%.
The report also revealed that young professionals, aged 22 to 27, face the highest risk of job displacement as CEOs target simple tasks that typically served to train new hires. Because generative AI excels at codifiable, routine entry-level tasks, companies are slowing down traditional junior hiring pipelines. Standard Chartered recently announced plans to cut 7,000 jobs to replace ‘lower-value human capital’ and focus on automation.
Confirming the trend is another report from the consulting firm Oliver Wyman, based on a global survey of CEOs. The Oliver Wyman report revealed that the number of companies actively reducing junior/entry-level roles spiked from 17% to 43% in a single year due to automation.
Whether massive AI adoption and the resulting trends are worth it remains to be seen. Around 40,000 tech industry employees lost their jobs in the first quarter of 2026. Despite such trends, the Mercer report found that only 32% of surveyed executives believe their companies can effectively combine human labor with AI systems, even as they heavily push for AI to maximize return on investment.
Oliver Wyman’s report shows that AI was a top-three priority for most CEOs, with more 90% confirming the deployment or intention to deploy AI in their companies. Conversely, more than 50% say they can’t yet tell whether this AI deployment is actually delivering on the expected productivity gains.
A mere 27% of CEOs said the return on AI investment had actually met or exceeded expectations, down from 38% the previous year. Nearly 25% said they had seen absolutely no impact on revenue. The report suggests that the realities of redesigning entire workflows may be curbing AI enthusiasm, even as the worrisome trends continue.
While massive corporations like Amazon, Accenture, and Meta continue to announce thousands of job cuts tied to automation, macroeconomic data reveal a more complex narrative. Data highlighted by Fortune shows that automation-driven layoffs have frequently failed to deliver promised financial returns or measurable productivity gains.
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Another interesting narrative is an AI smokescreen. Reports from labor analysts like Challenger, Gray & Christmas indicate that while AI is the most frequently cited reason for job cuts, many experts believe tech CEOs are using AI as a smokescreen to mask deeper internal struggles, corrections to overhiring, and shifts toward outsourcing.
In many ways, the reports paint a picture of a corporate world charging headfirst into an AI transformation it barely understands. Companies are cutting entry-level roles that traditionally trained the next generation of workers, even as many executives privately admit they still cannot prove the technology delivers meaningful returns. If the trend continues, an entire generation could find itself shut out of the traditional career pipeline altogether — trapped in a labor market that increasingly demands experience while simultaneously eliminating the jobs designed to provide it.
Proponents argue that humanity as a whole has always emerged unscathed and better off after massive technological revolutions, despite initial fears and shake-ups. On the other hand, opponents argue that a zoomed-in view of the actual impact such changes have is necessary for ethical implementation. We recently reported that a Chinese court ruled that companies cannot replace workers simply because “AI can do a better job.”
Etiido Uko is a news contributor for Tom's Hardware covering the latest updates in big tech and the PC industry. He is a mechanical engineer and senior technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things engineering and technology, and is an expert in gadgets, manufacturing, robotics, automotive, and aerospace.
I'm sorry but this is backwards. AI gives entry level an immediate level up allowing them to do higher level work for less money.
I did a project recently where a subordinate was hired to help an upper level person. I created an agent where the upper level person could spew a stream of consciousness in to a mic and this thing would make structured data that was fed in to a RAG so the newbie could bother the chat bot all day without interrupting the real person. Its not perfect but it got the new person up to speed fast.
They do have it backwards, As soon as AI is large and in charge it will be the CEO CFO board of directors and the majority of the executives that AI will realize are not need or required and will be dismissed.
Oh, I don't think they have it backwards. "99% of CEOs now expect AI-driven layoffs" is definitely true - CEOs do expect to drop head count. That expectation is definitely what the C-suite is thinking and banking on (pun intended).
Also, the executives being dismissed when shown to be not needed is similarly laughable. They still keep their position & overly-generous compensation packages, even when it's been seen that they don't contribute near the value that their (entry level x absurdly high multiplier) salary/benefits would indicate. Elon Musk & Tesla is a prime & easy example of that.
Elon Musk & Tesla is a prime & easy example of that.
Tesla isn't really an example of anything. The board is basically all in Musk's pocket, and the only thing really propping it up is its MEME stock status.
Also, though, it goes without saying — eat the rich. So long as the people on top sit there, manipulating things to their benefit by destroying quality of life for everyone below them, they deserve to lose everything.
I'm sorry but this is backwards. AI gives entry level an immediate level up allowing them to do higher level work for less money.
I did a project recently where a subordinate was hired to help an upper level person. I created an agent where the upper level person could spew a stream of consciousness in to a mic and this thing would make structured data that was fed in to a RAG so the newbie could bother the chat bot all day without interrupting the real person. It’s not perfect but it got the new person up to speed fast.
“Upper level” people should not be “bothered” by less experienced people (“lower-value human capital”, from the tech overlord quoted in the piece). The AI frenzy is really good at showing capitalism for what it is.
