Concerns about artificial intelligence’s impact on the workforce are growing in tandem with rapid advancements in AI technology and the increasing availability of automation tools. Evidence suggests these fears are well-founded. A November MIT study estimated that nearly 12% of existing jobs could already be automated using current AI capabilities. Meanwhile, surveys reveal that employers are already eliminating entry-level roles due to AI adoption, and companies are citing the technology as a justification for layoffs. As enterprises deepen their integration of AI, many may reassess how many employees they truly need. A recent TechCrunch survey of enterprise venture capitalists found widespread expectation that AI will significantly reshape the workforce by 2026—even though the question wasn’t explicitly asked. This underscores a growing consensus among investors that transformative changes are on the horizon. Eric Bahn, co-founder and general partner at Hustle Fund, anticipates major shifts in labor dynamics by 2026 but remains uncertain about the exact outcomes. “I want to see what roles traditionally defined by repetition get automated—and even more complex, logic-driven roles become automated,” he said. “Will this lead to widespread layoffs? Higher productivity? Or will AI simply augment the workforce, making existing employees more effective? These questions remain unanswered, but something substantial is clearly coming.” Marell Evans, founder and managing partner at Exceptional Capital, predicts that as companies increase AI spending, they will divert funds away from hiring and labor budgets. “I believe that while AI budgets rise incrementally, we’ll simultaneously see more human labor cut,” Evans said. “Layoffs will continue to have a strong impact on the U.S. employment rate.” Rajeev Dham, managing director at Sapphire, echoed this sentiment, noting that 2026 budgets will likely reflect a strategic shift from labor to AI investments. Jason Mendel, a venture investor at Battery Ventures, went further, predicting that by 2026, AI agents will evolve beyond tools that enhance productivity to systems capable of fully automating tasks—marking the beginning of genuine labor displacement in certain sectors. Antonia Dean, partner at Black Operator Ventures, highlighted a more cynical perspective: even if companies aren’t actively reallocating budgets toward AI, they may still use AI as a justification for workforce reductions. “The complexity lies in the fact that many enterprises, regardless of their readiness to deploy AI effectively, will claim they’re investing in AI to explain cuts in other areas or reductions in staffing,” she said. “In reality, AI may become a convenient scapegoat for executives covering up poor strategic decisions.” While many AI companies argue their technology doesn’t eliminate jobs but instead frees workers from repetitive tasks, enabling them to focus on higher-value work, skepticism remains widespread. Investors in the space acknowledge that these reassurances may not ease public anxiety. By 2026, the fear that AI will displace workers appears poised to become a tangible reality for many.