KPMG: Less Than One in 10 CEOs Plan to Cut Jobs Due to AI

KPMG has released its US CEO Outlook Pulse survey, which finds that CEOs are facing major people and technology investment decisions as AI reshapes the future of work. 

Tim Walsh, CEO of KPMG US, refers to this as the ‘labour cost margin’, telling Fortune that the question he asks for any business engagement is: “What is my mix of labour? What’s my mix of technology? And what’s the overall cost of delivering that engagement?”

As company investments in AI go up, Tim says: “I’m going to be able to run a lot more volume through my business in ways that I couldn’t before.”

Are employee headcounts increasing?

Despite investments in AI increasing, the survey – which polled 100 CEOs in large US companies – found that fewer than one in 10 business leaders are planning to reduce their headcounts as a result of their AI investments. 

Instead, more than half of those surveyed say they expect that AI will increase their hiring efforts in 2026, while 36% expect no change. 

According to Tim, AI is already transforming the way the company hires. 

He tells Fortune: “We’re hiring technologists in ways that we never did before. We’re hiring people that we call orchestrators, people that are actually managing gigantic parts of our workflow to make sure they’re complete, they’re accurate, that they’re getting to the right output.”

Other large scale companies have also reported that they plan to increase their hiring in 2026 – such as IBM, which has revealed it plans to triple its entry-level hiring across the course of the year. 

Nickel LaMoreaux, Chief Human Resources Officer of IBM, says that while AI has changed the way companies hire, employees can bring new value to their organisation. 

Speaking at Charter’s Leading with AI summit, she told attendees: “The entry-level jobs that you had two to three years ago, AI can do most of them.

“So, if you’re going to convince your business leaders that you need to make this investment, then you need to be able to show the real value these individuals can bring now. And that has to be through totally different jobs.”

Increasing AI investments

As AI growth continues to scale, there are increasing pressures for companies to invest in the technology – which Tim describes as “dizzying”. 

According to KPMG, nearly 80% of CEOs say 5% of their total capital budgets are being allocated to AI, while 35% put the number at between 11% and 20%. 

“It’s stressful if you’re not investing, if you’re not keeping up. Because if you’re not keeping up, you have the risk of losing market share,” Tim says. 

Despite these investments, research suggests that there is still uncertainty surrounding the long term impact of AI. 

According to PwC, CEOs are reporting their lowest level of revenue confidence in five years, partially due to rapid technological change. Of those surveyed, only 12% of CEOs shared that AI had delivered cost savings and revenue benefits over the past year. 

“There is no doubt that every single layer within the labor pool is going to be disrupted,” Tim says. “But anyone who tells you what it’s going to do or knows what the shape of it’s going to be isn’t being truthful, because it’s unclear at the moment.”​