TL;DR
Venture investors and industry observers told TechCrunch they expect clear workforce impacts from AI to begin surfacing in 2026. While some see automation replacing repetitive roles, others say the technology may be used to justify cuts or shift budgets toward AI projects.
What happened
Venture investors speaking to TechCrunch flagged 2026 as a turning point for how artificial intelligence affects enterprise employment. The concern follows research and reporting suggesting automation potential: an MIT estimate cited that roughly 11.7% of jobs could already be automated with current AI, and employers have begun reducing entry-level roles and attributing layoffs to AI. Multiple investors—without being prompted on the topic—predicted that next year firms will either deploy AI to boost productivity or use it to replace workers. Some expect budgets to move from hiring to AI spending, and others foresee agent-like software taking on whole tasks rather than simply augmenting staff. At the same time, a number of venture capitalists warned that executives may invoke AI as an explanation for workforce reductions even where readiness or direct causation is unclear.
Why it matters
- Corporate spending could shift from labor costs to AI development and procurement, altering hiring patterns.
- Automation of repetitive tasks may reduce demand for entry-level roles and change career progression paths.
- Widespread adoption of AI agents could remove certain human-performed workflows, affecting productivity metrics.
- Claims that layoffs are due to AI may complicate accountability and make workforce planning less transparent.
Key facts
- A November MIT study estimated about 11.7% of jobs could be automated using AI.
- TechCrunch reported multiple enterprise-focused investors expecting notable labor impacts in 2026.
- Investors cited both automation of repetitive roles and the potential for AI to handle more complex, logic-driven tasks.
- Some VCs believe companies will reallocate budgets from hiring toward AI initiatives in 2026.
- There are already reports of employers eliminating entry-level positions and citing AI as a cause for layoffs.
- One investor predicted 2026 will be the year software agents begin automating work beyond productivity aids.
- Other investors warned AI may be used as a rationale for cuts unrelated to actual AI readiness or capability.
What to watch next
- Whether companies publicly shift hiring budgets toward AI projects during 2026 and how large that reallocation is.
- Trends in layoffs and whether firms increasingly cite AI as the stated reason for reductions.
- Adoption rates and real-world deployment of autonomous 'agent' software to perform end-to-end tasks.
- not confirmed in the source: specific government or regulatory responses to labor shifts caused by AI
Quick glossary
- Artificial Intelligence (AI): Computer systems or software that perform tasks typically requiring human intelligence, such as language understanding, decision-making, or pattern recognition.
- Automation: The use of technology to perform tasks with reduced or no human intervention.
- Software Agent: An autonomous program that can carry out specified actions on behalf of a user or system, often to complete tasks or workflows.
- Enterprise VC: Venture capital investors who focus on funding companies that build products and services for businesses and organizations.
Reader FAQ
Will AI cause mass layoffs in 2026?
Not confirmed in the source; investors expect notable impacts in 2026 but the scale and sectors affected are not specified.
How many jobs are at risk of automation?
The source cites an MIT estimate that about 11.7% of jobs could already be automated using AI; this is an estimate, not a certainty.
Which types of roles are most likely to be affected?
Investors highlighted repetitive tasks and some entry-level positions as vulnerable; some also mentioned more logic-driven roles could be impacted.
Are companies saying AI is the reason for layoffs?
According to investors cited in the source, some firms are already attributing workforce reductions to AI and may use AI as a rationale for cuts.
Concerns about how AI will affect workers continue to rise in lockstep with the pace of advancements and new products promising automation and efficiency. Evidence suggests that fear is warranted….
Sources
- Investors predict AI is coming for labor in 2026
- 2026 Work Trends: 10 Experts Predict The Future Of Work
- 2026 AI Business Predictions
- AI Could Trigger a New Wave of Job Losses in 2026
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