As advancements in artificial intelligence accelerate and new products promise greater automation and efficiency, concerns about AI’s impact on employment continue to grow.
Evidence suggests these apprehensions are well-founded.
A November MIT study indicated that roughly 11.7% of existing jobs could already be automated by AI. Additionally, surveys have shown that employers are increasingly eliminating entry-level positions due to the technology, and some companies are already pointing to AI as a reason for layoffs.
As businesses more extensively integrate AI, some may begin to scrutinize their staffing requirements more closely.
Intriguingly, in a recent TechCrunch survey, several enterprise VCs spontaneously expressed that AI is expected to have a substantial impact on the enterprise workforce in 2026, even though the survey did not specifically prompt this topic.
Eric Bahn, co-founder and general partner at Hustle Fund, anticipates labor impacts in 2026, though the exact form these changes will take remains uncertain.
“I want to see what roles that have been known for more repetition get automated, or even more complicated roles with more logic become more automated,” Bahn stated. “Is it going to lead to more layoffs? Is there going to be higher productivity? Or will AI just be an augmentation for the existing labor market to be even more productive in the future? All of this seems pretty unanswered, but it seems like something big is going to happen in 2026.”
Marell Evans, founder and managing partner at Exceptional Capital, projected that companies seeking to increase AI spending will divert funds from their labor and hiring budgets.
“I think on the flip side of seeing an incremental increase in AI budgets, we’ll see more human labor get cut and layoffs will continue to aggressively impact the U.S. employment rate,” Evans commented.
Rajeev Dham, managing director at Sapphire, echoed this sentiment, believing that 2026 budgets will see resources shifting from labor to AI. Jason Mendel, a venture investor at Battery Ventures, further added that in 2026, AI will move beyond merely being a tool to enhance existing worker efficiency.
“2026 will be the year of agents as software expands from making humans more productive to automating work itself, delivering on the human-labor displacement value proposition in some areas,” Mendel explained.
Antonia Dean, a partner at Black Operator Ventures, suggested that even if companies are not genuinely reallocating labor budgets toward AI projects, they will likely still use AI as the stated reason for layoffs or reductions in labor costs.
“The complexity here is that many enterprises, despite how ready or not they are to successfully use AI solutions, will say that they are increasing their investments in AI to explain why they are cutting back spending in other areas or trimming workforces,” Dean articulated. “In reality, AI will become the scapegoat for executives looking to cover for past mistakes.”
Many AI companies contend their technology does not eliminate jobs but rather facilitates a shift for workers toward “deep work” or higher-skilled positions, while AI handles repetitive “busy work.”
However, this argument is not universally accepted, and fears of job automation persist. According to venture capitalists investing in this sector, these concerns are unlikely to subside in 2026.