Investors Forecast AI to Begin Replacing Human Labor by 2026

Worries about how AI will impact the workforce are growing just as fast as the technology itself, with new tools constantly emerging that promise greater automation and efficiency.

There is good reason for this concern.

A November MIT study estimated that 11.7% of jobs are already susceptible to AI automation. Surveys indicate that some employers are already cutting entry-level positions due to this technology, and companies have begun citing AI as a reason for layoffs.

As businesses integrate AI more deeply, many will likely re-evaluate their actual staffing needs.

In a recent TechCrunch survey, multiple enterprise venture capitalists predicted that AI will significantly reshape the corporate workforce in 2026. This insight was notable because the survey did not specifically ask about it.

Eric Bahn, co-founder and general partner at Hustle Fund, anticipates noticeable effects on labor in 2026, though the exact outcome remains unclear.

“I want to see which repetitive roles get automated, or even more complex logical tasks become more automated,” Bahn said. “Will it lead to more layoffs? Will it boost productivity? Or will AI simply augment the existing labor force to be more productive? These questions are still open, but 2026 seems poised for a major shift.”

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Join the Disrupt 2026 waitlist for priority access when Early Bird tickets are released. Past Disrupt events have featured industry giants like Google Cloud, Netflix, Microsoft, Box, Phia, a16z, ElevenLabs, Wayve, Hugging Face, Elad Gil, and Vinod Khosla. They are among over 250 leaders headlining 200+ sessions designed to accelerate your growth and sharpen your competitive edge. You'll also have the chance to connect with hundreds of startups driving innovation across all sectors.

Marell Evans, founder and managing partner at Exceptional Capital, predicts that companies aiming to boost AI spending will redirect funds from their labor and hiring budgets.

“I believe that alongside a steady rise in AI budgets, we will see more human labor cuts, and layoffs will continue to aggressively affect the U.S. employment rate,” Evans said.

Rajeev Dham, managing director at Sapphire, agrees that 2026 budgets will increasingly shift resources from labor to AI. Jason Mendel, a venture investor at Battery Ventures, added that by 2026, AI will evolve beyond a tool for boosting worker efficiency.

“2026 will be the year of agents, as software progresses from enhancing human productivity to automating the work itself, finally delivering on the promise of human labor displacement in certain fields,” Mendel said.

Antonia Dean, a partner at Black Operator Ventures, noted that even if companies aren't formally moving labor budgets to AI, they may still use AI as a justification for layoffs or cost-cutting.

“The tricky part is that many enterprises, regardless of their actual readiness to deploy AI successfully, will cite increased AI investment to explain cuts in other areas or workforce reductions,” Dean said. “In practice, AI will become a convenient scapegoat for executives covering for past mistakes.”

Many AI firms contend their technology doesn't erase jobs but instead frees workers for 'deep work' or higher-skilled roles by automating mundane, repetitive tasks.

However, not everyone is convinced by this argument, and anxiety about job automation persists. According to VCs specializing in the field, these fears are unlikely to subside in 2026.