If you’re tired of hearing about AI-driven layoffs, we have some unfortunate news for you. In a global survey of 12,000 C-suite executives, HR leaders, investors, and employees, Mercer found that 99% of executives expect AI to lead to at least some headcount reduction in the next two years. A similar number are also planning organization design changes during the same period, which suggests that a workplace revamp is on the cards across organizations.
Considering the spate of layoffs we have had this year that have been placed at the altar of artificial intelligence, many may not be surprised to find that executives predict additional AI-themed layoffs by 2027. But the consensus on this somewhat diminishes any notions that the advancement of the technology is expected to benefit the workforce at large. As reports such as this one continue to emerge, tech businesses and AI startups may rejoice at the widespread adoption of the technology, but for the workforce, unchecked cuts remain a constant threat to their career longevity.
Mercer’s report showed that 99% of executives expect AI-driven layoffs by 2027, but talent growth remains a priority for HR. (Image: Freepik)
Executives Report Consensus on the Possibility of Layoffs Prompted by AI
AI-driven layoffs are no longer a novelty, as just this month, companies like Meta, Cisco, GitLab, and ClickUp confirmed plans to cut jobs in order to optimize for the AI revolution. For the most part, these cuts have emerged as a way to save for investments in technology, but there has been an equally motivated effort to ensure that the workforce is carefully organized around AI as well. Consulting firm Mercer’s Global Talent Trends report took a closer look at how leaders are approaching tech. Not only did it find some alarming stats, but it also revealed a clear misalignment between C-suite and HR priorities.
The most riveting finding in the survey revolved around the AI-based layoffs, which showed that 99% of C-suite leaders are inclined to believe that headcount reductions by 2027 are on the cards. For 63% of them, this desire to tailor operations around AI emerges from a desire to redefine how work is performed by incorporating AI and automation as a major value driver. Disappointingly, only 32% believe their workforce can optimally combine human and machine capabilities.
Where Does Human Talent Figure Into These Plans for the Future?
Over the last year, many leaders have reiterated the idea that the ultimate goal for the workplace is to combine human talent with technological advancements to maximize output, but the data here suggest that many no longer feel the same. This isn’t to say that organizations have already given up on talent. They are, however, looking for something specific.
About 54% of C-suite executives told Mercer that talent scarcity is the top macro driver influencing people plans. Meanwhile, 59% of HR leaders added that attracting talent with vital digital skills remains the top workforce challenge that businesses are facing this year. The C-suite AI layoffs survey also found that 57% of leaders believe improving people analytics capabilities as the people initiative will drive ROI, but only 27% of them have faith in their HR teams to effectively advise them on human capital risks and opportunities.
The data indicates that talent optimization continues to drive business operations, despite technological advancements, but somewhere along the line, C-suite leaders and HR teams are not sufficiently aligned with each other. With the changing nature of workplace demands, the role of HR is indeed evolving today. Some businesses have turned to firing their HR teams to come up with new people management categories, but we expect that the evolution of HR is also possible without such drastic measures.
A Disconnect Between HR and C-Suite Operations Can Be Detrimental to Operations
AI has been marketed as an inevitable force, and the trends confirm that a large majority of organizations are oriented towards working the technology into every level of operation. This shift, however unavoidable, cannot be managed without accounting for the cooperation and capabilities of the workforce. This requires active collaboration with employees, certainly, but it also requires organizations to include managers and HR teams in the planning process as they kickstart change.
C-suite’s top people initiatives for driving ROI include redesigning work to incorporate AI and automation, improving HR and people analytics capability, and improving managers’ abilities to lead an integrated workforce. HR’s top priorities for 2026 center on enhancing the employee experience/EVP to attract top talent, designing talent processes around skills, and rolling out new HR technologies or optimizing existing platforms.
As the data shows, there is some overlap between priorities and goals between leadership and HR, but without a consensus on the future or workplace operations, businesses can expect to struggle with fully rolling out any strategy at full capacity. Even as we move towards a new era of employment, where HR and IT roles merge more comprehensively, the quality of the transition may just be determined by how decision-makers introduce balance into the strategy and account for the talent that will drive it.
Have your own predictions on AI layoffs and the consensus showcased by executives? Share them with us in the comments. Subscribe to The HR Digest for more insights on workplace trends, layoffs, and what to expect with the advent of AI.
