Most bosses expect AI to cause layoffs, worker morale drops

A new report from consulting firm Mercer shows that 99% of 825 business leaders expect AI to cause some layoffs in the next two years. Tech layoffs in 2026 already passed 100,000, with AI often cited as a key reason.

Meanwhile, employee anxiety about AI is growing. The share of workers who feel actively engaged dropped from 66% in 2024 to 44%. If employees think they can't get fair access to AI tools or training, 35% would consider quitting. Uneven AI resources inside companies are hurting productivity.

Executives are still optimistic—63% believe redesigning work around AI will pay off. But reality tells a different story. A January survey found over half of CEOs who adopted AI saw no cost cuts or revenue growth. Companies like Block and Meta now admit AI is linked to layoffs.

Only 30% of leaders think their teams can effectively combine human and AI skills. The top factor in workforce planning is "talent shortage," while "AI acceleration" ranks second—a strange situation where firms cut jobs due to AI but worry about lacking talent. Public opinion on AI hasn't improved, with rising job losses and controversies around AI-generated content.