Investors predict AI is coming for labor in 2026 

Concerns about the impact of AI on workers continue to grow, in line with the pace of developments and new products that promise automation and efficiency.

There is evidence that fear is justified.

A November MIT Research shows that an estimated 11.7% of jobs exist could already be automated using AI. Surveys have shown that employers are already cutting entry-level jobs because of technology. Companies are also already pointing to AI as a reason for layoffs.

As companies adopt AI more meaningfully, some may take a closer look at how many employees they really need.

In a recent TechCrunch survey, several enterprise VCs said AI will have a major impact on enterprise workforces by 2026. This was especially interesting because the survey did not specifically ask about it.

Eric Bahn, co-founder and general partner at Hustle Fund, expects an impact on the labor market in 2026. He just doesn’t know exactly what that will look like.

“I want to see which roles that are known to be repeated more often become automated, or even more complicated roles with more logic become more automated,” Bahn said. “Will it lead to more layoffs? Will there be higher productivity? Or will AI just augment the existing labor market to be even more productive in the future? This all seems pretty open-ended, but it looks like something big is going to happen in 2026.”

Marell Evans, founder and managing partner at Exceptional Capital, predicted that companies looking to increase AI spending will pull money from their pool for labor and hiring.

“I think on the other side of the incremental increase in AI budgets we will see more cuts to human labor and layoffs will continue to have an aggressive impact on American employment,” Evans said.

Rajeev Dham, managing director at Sapphire, agreed that the 2026 budgets will see a shift of resources from labor to AI. Jason Mendel, a venture investor at Battery Ventures, added that by 2026, AI will move beyond simply being a tool to make existing workers more efficient.

“2026 will be the year of agents, as software expands from making people more productive to automating the work itself, in some areas realizing the value proposition of moving people and labor,” Mendel said.

Antonia Dean, a partner at Black Operator Ventures, said that even if companies don’t shift their labor budgets to AI projects, they will likely still say that AI is the reason for layoffs or a reduction in labor costs anyway.

“The complexity here is that many companies, whether or not they are ready to use AI solutions successfully, will say they are increasing their investments in AI to explain why they are cutting back in other areas or reducing workforces,” Dean said. “In reality, AI will become the scapegoat for executives who want to cover up past mistakes.”

Many AI companies claim that their technology does not eliminate jobs, but rather helps move workers into “deep work” or higher skilled jobs, while AI merely automates repetitive “busy work.”

But not everyone buys that argument, and people fear their jobs will be automated. According to venture capital funds investing in that area, it doesn’t seem like these fears will be quelled in 2026.