rewrite this title Investors predict AI is coming for labor in 2026  | TechCrunch

Concerns about how AI will affect workers continue to rise in lockstep with the pace of advancements and new products promising automation and efficiency.

Evidence suggests that fear is warranted.

A November MIT study found an estimated 11.7% of jobs could already be automated using AI. Surveys have shown employers are already eliminating entry-level jobs because of the technology. Companies are also already pointing to AI as the reason for layoffs.

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

In a recent TechCrunch survey, multiple enterprise VCs said AI will have a big impact on the enterprise workforce in 2026. This was particularly interesting because the survey didn’t specifically ask about it.

Eric Bahn, a co-founder and general partner at Hustle Fund, expects to see affects on labor in 2026. He’s just not sure exactly what that will look like.

“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.”

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

“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. Jason Mendel, a venture investor at Battery Ventures, added that AI will start to surpass just being a tool to make existing workers more efficient in 2026.

“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.

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

“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.”

Many AI companies argue their technology doesn’t eliminate jobs but rather helps shift workers to “deep work” or to higher-skilled jobs while AI just automates repetitive “busy work.”

But not everyone buys that argument, and people are worried that their jobs will be automated. According to VCs who invest in that area, it doesn’t sound like those fears will be quelled in 2026.