VCs say 2026 is when AI really hits the labor market

Worker anxiety about AI isn’t theoretical anymore.

A November MIT study found that an estimated 11.7% of jobs could already be automated using AI. Surveys show employers are cutting entry-level roles because of the tech. Companies are already pointing to AI as the justification for layoffs.

Now investors are saying the quiet part out loud: 2026 is when that impact shows up in force.

Investors see a turning point in 2026

In a recent TechCrunch survey of enterprise VCs, multiple investors said AI will have a big impact on the enterprise workforce in 2026. The survey didn’t even specifically ask about jobs — the topic surfaced anyway.

That alone is a signal. When people whose job is to read budgets and roadmaps start volunteering opinions about labor disruption, you should pay attention.

Eric Bahn: “Something big is going to happen in 2026”

Eric Bahn, co-founder and general partner at Hustle Fund, expects AI to start reshaping who does what inside companies next year, even if the exact contours are still fuzzy.

“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 said.

“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.”

That’s the core tension for knowledge workers: Will AI replace them, or simply amplify them? Bahn is effectively saying we’ll start to get real answers in 2026, not just hype.

Budgets shifting from people to models

If you want to predict the future of jobs, follow the money.

Marell Evans, founder and managing partner at Exceptional Capital, expects companies to increase AI spending by raiding the labor budget.

“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 said.

Rajeev Dham, managing director at Sapphire, agreed that 2026 budgets will start to shift resources from labor to AI. That doesn’t mean a sudden mass replacement of humans, but it does mean that extra headcount will increasingly have to compete with AI projects for every dollar.

For employees, that matters. When AI sits in the same line item as compensation, every new model, agent, or automation proof-of-concept gets weighed against hiring a person or backfilling a role.

2026 as the year of AI agents

Some investors think 2026 will mark a qualitative shift in how AI shows up at work — from tools to agents.

Jason Mendel, a venture investor at Battery Ventures, said AI is about to move beyond simply boosting productivity.

“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 said.

That’s a very specific phrase: “human-labor displacement value proposition.” It’s the part of the AI pitch deck that many vendors downplay publicly but investors and CFOs absolutely zero in on. If agents can reliably own whole workflows, some tasks — and some jobs — don’t need humans in the loop at all.

AI as scapegoat for old mistakes

Not every layoff that’s branded as “AI-driven” will actually be about AI.

Antonia Dean, a partner at Black Operator Ventures, expects executives to conveniently blame AI for workforce cuts that are really about prior missteps or general belt-tightening.

“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 said.

“In reality, AI will become the scapegoat for executives looking to cover for past mistakes.”

That framing matters for workers and policymakers. If AI becomes the catch-all excuse for layoffs, it gets harder to distinguish:

• genuine technological displacement
• routine cost-cutting
• corrections for bad strategy or over-hiring in earlier years

The risk: public debate focuses on “AI took my job,” while the real drivers are more complicated.

The industry narrative vs. worker fears

Many AI companies insist their tools don’t eliminate jobs. Instead, they argue, AI will:

• automate repetitive “busy work”
• free people up for “deep work”
• push workers into higher-skilled roles

But the way capital is moving — and the way investors are talking — makes that promise harder to swallow.

We already have:

• an MIT estimate that 11.7% of jobs are technically automatable with AI right now
• employers dropping entry-level positions due to AI
• companies explicitly citing AI as a reason for layoffs

Layer on top of that a cohort of enterprise VCs openly predicting:

• bigger AI budgets at the expense of hiring
• AI agents that automate end-to-end work
• AI being used as a cover story for workforce cuts

According to the investors closest to this wave of tools, 2026 is not going to calm anyone’s nerves. If anything, it’s shaping up as the year AI’s impact on labor stops being a theoretical debate and starts showing up, line by line, in budgets and headcount plans.