Many American businesses do not want to hire employees in 2026

Forecasters at recruitment site Indeed believe that recruitment growth next year will be very low. Companies like Shopify and Chime Financial even claim their staff size is almost unchanged.

At an event for CEOs hosted by the Yale School of Management in Manhattan this month, 66% of executives surveyed said they planned to lay off workers, or maintain their current size, next year. Only about a third have hiring plans.

“Many companies have a wait-and-see mentality. The current unstable situation makes them not prioritize investing in human resources,” said Chris Layden – CEO of human resources supply company Kelly Services.

In fact, companies in the US have not been interested in recruiting for many months. The unemployment rate increased to 4.6% in November – the highest in 4 years. Although the US is still creating more jobs in areas such as healthcare and education, there are increasing signs that the white-collar labor market is slowing down. A series of large businesses such as Amazon, Verizon, Target and United Parcel Service (UPS) have cut office positions in recent months, increasing worker insecurity.

The hesitancy about hiring reflects economic concerns and a belief that AI could take over more jobs in large corporations. Others hired too many people after the pandemic and are readjusting.

“We are very close to zero job growth. That is not a healthy labor market,” Christopher Waller – a member of the Board of Governors of the US Federal Reserve (Fed) commented at the Yale conference. “When I talk to CEOs, they explain that they don’t hire because they want to wait and see what happens with AI. Which jobs can be replaced, which jobs can’t,” he said.

The hiring freeze can be temporary, if companies later find they need more people to meet growth goals. But according to Waller, the current mentality is that businesses do not need more workers. “Everyone is afraid of losing their jobs. I’m very serious,” he said.

The current situation also makes many workers determined to stay at work. At IBM, the turnover rate is at a 30-year low, according to CEO Arvind Krishna. At IBM US, the voluntary turnover rate is currently below 2%, down sharply from the normal level of about 7%.

“People are not looking to change jobs. That leads to a decline in recruitment, because no one is leaving,” Krishna explains.

At a recent conference, when asked about recruitment plans, Shopify Finance Director Jeff Hoffmeister said: “I don’t see a need to increase staff next year. We have maintained this scale for more than 2 years.”

At Wells Fargo, CEO Charlie Scharf said this month that the bank expects to have fewer employees next year. The bank’s workforce has decreased from 275,000 people in 2019 to about 210,000 today, due to management reducing costs and restructuring.

Scharf predicts the impact of AI on human resources will be “huge,” although it may take years to fully manifest. Many leaders are afraid to speak frankly about the damage that AI can cause to the labor market. “Nobody wants to stand up and say we’re going to have less staffing in the future. That’s very difficult,” Scharf said.

Wells Fargo says it will continue to retrain its workforce, but the change AI brings is clear. “It doesn’t completely replace humans, but creates opportunities to do things differently,” he said.

Economists at Indeed recently updated their hiring scenarios for next year and expect the overall picture to remain largely unchanged. After analyzing the number of vacancies and growth forecasts, they think the unemployment rate will be around 4.6% in 2026. “We don’t expect things to change much next year,” said Laura Ullrich – director of economic research at Indeed.

The industries with the weakest recruitment demand are those that record high salaries such as data analysis, software development, marketing and entertainment. Meanwhile, recruitment activities are more active in industries such as healthcare and construction.

Although white-collar employment has declined, Ullrich said the situation could still change. If the economy grows next year, some businesses may need to hire more people.

“You cannot maintain an environment of low hiring, low firing while GDP is still growing. At some point, something will have to shift,” she said.