Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
For the past two years, workforce planning conversations have been dominated by a single question: what will AI replace next?
But executives making actual hiring decisions appear to be asking something much simpler: what does the revenue outlook justify?
A growing gap is emerging between public narrative and operational reality. The headlines track automation. Leadership teams track income statements. And increasingly, the second one wins.
Did Hiring Slow Because of AI?
Data from Chief Executive’s Financial Performance Benchmarks Report shows companies sharply pulled back on hiring in 2025 after expanding the year prior. In 2024, a majority of firms were still adding frontline workers. By 2025, most either froze hiring or reduced staff.
The reason was not primarily technology adoption.
Across organizations that changed staffing levels, revenue conditions were the dominant driver. About 71% of companies that increased headcount and 59% that reduced it cited revenue change as the deciding factor.
In other words, hiring followed sales performance, not software capability.
AI did play a role, but a smaller one. Roughly 31% of companies reported trimming headcount because of AI, making it a real influence but still secondary to business performance.
This distinction matters. Automation explains where roles change. Revenue explains whether they exist.
The Pattern Is Predictable
When revenue declined, companies cut workers. When revenue grew, companies hired.
The relationship was consistent across performance bands:
- Firms with declining revenue were far more likely to reduce frontline staffing
- Firms with modest growth cut far less often
- Faster-growing firms rarely reduced headcount at all
That pattern suggests workforce strategy remains fundamentally economic, not technological. AI moulds job design, but revenue determines organizational size.
Executives are not eliminating roles simply because technology allows it. They eliminate roles when demand cannot support them.
Why This Matters for Workspace Strategy
Flexible workspace conversations often mirror the AI debate. Many organizations assume automation reduces the need for space. But staffing levels, and therefore space demand, track business performance cycles more closely than technology cycles.
If headcount is revenue-sensitive, real estate strategy should be as well.
During uncertain demand periods, companies pause expansion, consolidate teams, and lean on flexible space. When revenue stabilizes, hiring resumes and space demand returns. The change is cyclical, not purely technological.
Hybrid and flexible space isn’t mainly about employee preference. It helps companies adjust quickly when revenue rises or falls.
AI Changes Tasks. Revenue Changes Organizations.
The report shows AI already influencing workforce decisions, but mainly as a refinement tool rather than a primary trigger. Automation removes specific activities and occasionally roles. Financial performance determines overall staffing scale.
That distinction explains why many organizations simultaneously deploy AI and still plan to hire. In fact, a majority of firms expect to grow headcount in 2026 after a cautious 2025.
Strategic CEOs will navigate this year with two separate things in mind:
- AI changes what people do.
- Revenue decides how many people you can afford.
When businesses confuse those, they react to tech headlines instead of business reality. The smarter move is simple: plan staffing based on demand, then use automation to improve the work.
