Concerns about how AI will impact workers continue to grow at a pace that keeps pace with advances and new products that promise automation and efficiency.
The evidence suggests the fear is justified.
An MIT study in November found that an estimated 11.7% of jobs could already be automated using AI. Research shows that employers are already eliminating entry-level jobs because of technology. Companies are already citing AI as a reason to cut staff.
As companies implement AI more meaningfully, some may take a closer look at how many employees they actually need.
In a recent TechCrunch survey, multiple corporate VCs say AI will have a significant impact on corporate employees in 2026. This was particularly interesting because the survey did not specifically ask about AI.
Eric Byrne, co-founder and general partner of the Hustle Fund, said he expects there will be an impact on labor in 2026, but he doesn’t know exactly what that will look like.
“We’d like to see what roles that are known to be repetitive get automated, or more complex roles with more logic get automated more,” Byrne said. “Will it lead to more layoffs? Will productivity increase? Or will AI just augment the existing labor market and make it even more productive in the future? All of this seems to have few answers, but it looks like something big will happen in 2026.”
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Marell Evans, founder and managing partner at Exceptional Capital, predicted that companies looking to increase spending on AI will pull funds from their own pools into workforce and hiring.
“While AI budgets increase incrementally, I think we will see more layoffs and layoffs continue to have a significant impact on U.S. employment rates,” Evans said.
Rajeev Dharm, managing director of Sapphire, agreed that the 2026 budget will start shifting resources from labor to AI. Jason Mendel, a venture investor at Battery Ventures, added that in 2026, AI will begin to become more than just a tool to make existing workers more efficient.
“2026 will be the year of the agent, as software expands from increasing human productivity to automating jobs themselves, delivering value propositions that replace humans and labor in some areas,” Mendel said.
Antonia Dean, a partner at Black Operator Ventures, said that even if companies don’t shift their payroll budgets to AI projects, they’re likely to say AI is the reason for layoffs or cuts in payroll anyway.
“The complication here is that many companies argue that they are increasing their investment in AI, which explains why they are cutting spending in other areas or cutting headcount, regardless of whether they are prepared to take advantage of AI solutions or not,” Dean said. “In reality, AI will become a scapegoat for executives looking to make up for past mistakes.”
Many AI companies argue that their technology does not eliminate jobs, but rather helps shift workers to “deep work” or higher-skill jobs, while AI only automates repetitive “busy tasks.”
However, not everyone agrees with that claim and people are worried that their jobs will be automated. According to venture capitalists investing in the field, these concerns will not be alleviated even in 2026.
