CEOs Expect AI-Driven Layoffs by 2028

A Mercer survey of 825 C-suite leaders finds 99% expect AI to drive headcount reductions by 2028, as employee thriving drops to 44% and AI-related job loss concern rises to 40%. Challenger data confirms AI as the top layoff reason for three consecutive months, with 40% of May cuts attributed to AI.

CEOs Expect AI-Driven Layoffs by 2028 Mercer's Global Talent Trends 2026 survey of 825 C-suite leaders finds 99% expect AI to drive headcount reductions within two years. Employee 'thriving' collapsed from 66% in 2024 to 44% in 2026 - below even pandemic-era levels per Mercer's official report - while worker concern about AI job loss jumped from 28% to 40% over the same period. Only 32% of executives believe their organizations can optimally combine human and machine capabilities. Challenger, Gray and Christmas data released June 4, 2026 corroborates the outlook: employers announced 97,006 job cuts in May, with AI cited as the primary reason for the third consecutive month, accounting for 38,579 of those cuts - 40% of the May total, up from just 7% in January. Entry-level roles face disproportionate risk as AI absorbs tasks historically used to build junior career pathways. An International Business Times report linked these data points alongside a warning from financial commentator Suze Orman to workers in so-called 'invisible' roles. What happened Mercer's Global Talent Trends 2026 survey, released February 25, 2026, polled nearly 12,000 C-suite executives, HR leaders, investors, and employees worldwide. Among 825 C-suite leaders specifically, 99% expect AI to drive at least some headcount reduction within two years - by 2028. The survey also found that 98% of executives plan organizational design changes over the same period, and 65% expect 11-30% of their workforce to be redeployed or reskilled due to AI. The report is now in its 11th year and is published by Mercer, a Marsh business. Worker distress Employee confidence is at a notable low: only 44% of workers report 'thriving' at work in 2026, down sharply from 66% in 2024 and below pandemic-era levels, according to Mercer's official press release. Worker concern about AI-driven job loss has grown from 28% in 2024 to 40% in 2026. Mercer finds 62% of employees believe leaders underestimate AI's emotional impact, yet only 19% of HR leaders factor these concerns into their digital implementation strategies - a gap that, per the report, risks compounding burnout and productivity loss. The readiness gap Despite near-universal executive intent to restructure around AI, only 32% of executives believe their organizations can optimally combine human and machine capabilities. Only 51% of C-suite leaders say their organization is well-prepared for the human-machine era, down from 65% in 2024. Investors appear more optimistic: 72% agree that companies integrating human and AI capabilities well will gain a competitive advantage, and 77% are more likely to invest in companies committed to AI education and training. Entry-level workers at disproportionate risk Tasks historically assigned to junior employees - research, administrative work, scheduling, data analysis, and basic content creation - are increasingly handled by AI tools. This narrows the career entry pathways that have traditionally allowed workers to build experience and progress to higher-paying roles. For practitioners, this implies growing emphasis on reskilling pipelines, mentorship for junior hires, and redesigning onboarding around tasks that complement rather than compete with automation. Corroborating data from Challenger, Gray and Christmas The executive expectations in the Mercer survey are tracking against real monthly data. According to Challenger, Gray and Christmas's June 4, 2026 report, employers announced 97,006 job cuts in May 2026, the highest May total since 2020. AI was cited as the primary reason for the third consecutive month, accounting for 38,579 cuts - 40% of the May total. That share accelerated sharply: from 7% of cuts in January to 25% in March, 26% in April, and 40% in May - the highest monthly AI-attributed share since Challenger began tracking the reason in 2023. For the full year through May, AI has been cited in 87,714 cuts 22% of all 2026 layoffs , already surpassing the 54,836 AI-attributed cuts recorded in all of 2025. Technology led May cuts with 38,242 - the sector's highest monthly total since August 2024. What to watch Useful leading indicators for practitioners include: Mercer follow-up releases with sector-level or role-specific breakdowns; changes in hiring advertisements that reveal shifting skill requirements; and whether large employers announce internal reskilling programs or externalize displaced workers to the market. The Challenger data's AI share - 40% of May cuts and accelerating from near-zero in January - is a practical monthly benchmark worth tracking in subsequent reports. Scoring Rationale The Mercer survey's near-universal CEO consensus 99% on near-term AI-driven headcount reductions, corroborated by three straight months of Challenger data showing AI as the top layoff reason and peaking at 40% of May cuts, gives this story concrete relevance for practitioners around hiring strategy and skills planning. The readiness gap only 32% of executives prepared and the sharp decline in worker wellbeing thriving down from 66% to 44%, below pandemic levels add depth. Scores at the low end of Notable rather than higher because it primarily aggregates survey and monthly labor data rather than announcing a product launch, regulatory milestone, or technical breakthrough. Practice interview problems based on real data 1,500+ SQL & Python problems across 15 industry datasets — the exact type of data you work with. Try 250 free problems /problems