Concerns about how AI will impact the workforce continue to rise in step with advances and new products that promise automation and efficiency.

Evidence suggests that fear is warranted.

The November MIT The study found an estimated 11.7% of jobs can now be automated using AI. Surveys show employers have eliminated entry-level jobs because of technology. Companies are targeting again AI as the cause of layoffs.

As businesses embrace AI more meaningfully, some may be taking a hard look at how many employees they need.

In a recent survey by TechCrunch, many business VCs said that AI will have a big impact on the business workforce in 2026. This is particularly interesting because the survey did not specifically ask about this.

Eric Bahn, a co-founder and general partner of the Hustle Fund, hopes to see the effects at work by 2026. He’s just not sure what it will look like.

“I want to see what tasks that are known for more repetition can be automated, or even more complex tasks with a lot of logic that can be more automated,” Bahn said. “Will it lead to more layoffs? Will there be higher productivity? Or will AI be an addition for the current labor market to be more productive in the future? All this seems to be unanswered, but it seems like something big will happen in 2026.”

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

“I think on the other side of seeing AI budgets continue to increase, we’re going to see a lot of people’s labor cuts and layoffs continue to aggressively affect the employment rate in the US,” Evans said.

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

“2026 will be the year of agents as software expands from making people more productive to automating work itself, delivering on the value proposition of human displacement in some areas,” Mendel said.

Antonia Dean, a partner at Black Operator Ventures, said that even if companies aren’t shifting labor budgets to AI projects, they are likely to attribute AI to layoffs or reduced labor costs.

“The complexity here is that many businesses, regardless of 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 spending in other areas or cutting workers,” said Dean. “In fact, AI will become a scapegoat for executives looking to cover up past mistakes.”

Many AI companies argue that their technology does not eliminate jobs but helps shift workers to “deep work” or to higher-skilled jobs while AI only automates repetitive “busy work.”

But not everyone buys that argument, and people worry that their jobs will be automated. According to VCs who invest in that area, it is not as if the fears will be eradicated in 2026.